The equation for the balanced budget multiplier can be written as

Suppose that country A pegs its currency to that of country B. Now suppose that there is an adverse demand shock in country A. Country B is more likely to cooperate and increase its money supply in response to country A's adverse demand shock when:

A) country B's output is below its preferred level. B) country B is experiencing high rates of inflation. C) country B wants country A to devalue its currency. D) country A is experiencing high rates of inflation.

The opportunity cost of producing in low-income, developing countries rises over the product cycle, according to theory

Indicate whether the statement is true or false