While the debate between output and the environment is subjective, all countries should aim to be where on the production possibility frontier?

Which of the following statements is true?

A) When two nations specialize and trade, there is a loss of efficiency and both the nations are made worse off. B) Trade between two nations is most beneficial when neither has a comparative advantage in the production of any goods and services. C) Trade between nations allows each nation to specialize in the production of goods in which it has comparative advantage. D) Trade between two nations is possible only when the opportunity costs of producing goods and services in both nations are identical.

If the actual government deficit (-) is equal to -$50 billion, then:

a. Fiscal policy must be expansionary. b. Fiscal policy could be expansionary, contractionary, or neutral. c. Monetary policy must be expansionary. d. Fiscal policy must be contractionary.