When the world price of the traded good is lower than the domestic no-trade equilibrium price, free trade causes domestic production to fall and domestic consumption to rise

The supporters of a monetary growth rule believe that active monetary policy

A) stabilizes the economy, decreasing the number of recessions and their severity. B) destabilizes the economy, increasing the number of recessions and their severity. C) cannot change real GDP. D) cannot change the inflation rate.

If the economic growth rate INCREASES from 1% to 5%, the simple accelerator hypothesis suggests that

A) investment will continue to rise as output increases. B) investment will fall as output increases. C) investment will rise since the rate of change in output increases. D) None of the above is correct.