Consider a two-country, two-commodity model. The table below shows the units of Good X and Good Y produced in Country A and Country B per labor hour. The number of labor hours required to produce one unit of Good X in Country A is ProductivityCountry ACountry BGood X1.000.50Good Y0.200.70 

Factors tend to be specific to certain uses and products

A) in the short run. B) in countries lacking comparative advantage. C) in capital-intensive industries. D) in labor-intensive industries. E) in countries lacking fair labor laws.

Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.

A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower