Free trade may lead to less pollution because
A. higher income can lead to political pressure on governments to enact tougher environmental protection policies.
B. competition among nations leads to stricter pollution standards.
C. it results in increased production and consumption of goods and services.
D. imported products are produced using cleaner production techniques than domestic products.
Answer: A
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Bagels and cream cheese are complementary goods. Suppose that the price for flour, which is used to produce bagels, increases. The equilibrium price of cream cheese ________, and the equilibrium quantity of cream cheese ________
A) does not change; does not change B) falls; decreases C) falls; increases D) rises; increases E) rises; decreases
Which of the following would most likely occur if the federal government decreased its spending and reduced the size of the budget deficit during a period of full employment?
a. The rate of inflation would decline. b. The rate of inflation would rise. c. A recession would develop. d. Interest rates would fall.