When Fidel Castro came to power in Cuba in 1959, Cuba's exports were predominantly sugar and tobacco and these exports made up a relatively large part of its economy. To counter this dependence on two goods, Castro's economic advisers used which of the following arguments to persuade him to impose trade restrictions?

What do cooperative firms do if they make a profit?

A) Cooperatives never earn profits, so this issue does not occur. B) Cooperatives must pay their profits to the federal governments as a windfall profit tax. C) Cooperatives must keep half of the profits and return the other half to their members. D) Cooperatives generally return the profits to their members as a dividend.

Which of the following statements is TRUE about the interest rate effect?

A) The interest rate effect is why the aggregate demand curve is upward sloping. B) A lower price level lowers the interest rate, which causes businesses and consumers to increase their desired spending. C) A higher price level lowers the interest rate, which causes business and consumers to increase their desired spending. D) Expenditures will change as a result of a change in the real value of money balances when there is a change in the price level.