The process of an economy adjusting from a recession back to potential GDP in the long run without any government intervention is known as

According to the aggregate expenditure model, when autonomous expenditure increases, equilibrium expenditure

A) increases by an equal amount. B) does not change because autonomous expenditures has no effect on equilibrium expenditure. C) does not change because only induced expenditures increase equilibrium expenditure. D) increases by a smaller amount. E) increases by a larger amount.

The economic principle that states that individuals or nations can gain by specializing in the production of goods that they produce cheaply and exchanging for other desired goods that they could only produce at a higher cost is

a. the law of absolute advantage. b. the law of comparative advantage. c. the law of production possibilities. d. the exchange maximum principle.