If the index of intra-industry trade is high, products are probably ______, and costs in both nations are ______.

Suppose that rising productivity increases potential output in each period by 4%. What kind of monetary policy would be needed to maintain a zero rate of inflation at full employment?

A. It should keep money supply constant. B. It should increase money supply by 4% in the first period and thereafter, hold money supply constant. C. It should increase money supply by 4% per period. D. It should decrease money supply by 4% each period.

Typically, the higher the level of income per person in a country, the higher the level of spending per person on health care. This relationship between income and spending indicates that health care is a

A) inferior good. B) necessity. C) normal good. D) luxury.