Which of the following would be the most likely candidate for direct application of the benefits principle of taxation?

Refer to the above figure. Unexpected contractionary monetary policy has caused the aggregate demand curve to shift to AD2. In the short run

A) the unemployment rate will be larger than the rate before the contractionary monetary policy. B) the unemployment rate will be smaller than the rate before the expansionary monetary policy. C) the unemployment rate will be the same rate as before the expansionary monetary policy. D) the unemployment rate can increase or decrease depending upon how much the LRAS will shift.

Intra-industry trade will tend to dominate trade flows when which of the following exists?

A) small differences between relative country factor availabilities B) large differences between relative country factor availabilities C) homogeneous products that cannot be differentiated D) constant cost industries E) uneven distribution of abundant resources between two countries