Specialization according to comparative advantage, followed by trade, allows everyone to acquire more of the goods they want

A rise in the real interest rate r

a. creates income and substitution effects that reduce C0. b. creates income effects that reduce C0, substitution effects that increase C0. c. creates income effects that increase C0, substitution effects that reduce C0. d. creates income and substitution effects that increase C0.

Which of the following would be most likely to help the residents of a nation produce a larger output and consume a wide variety of products at economical prices?

a. imposition of tariffs on imported goods b. quotas that protect domestic businesses against foreign producers that pay workers low wages c. free trade d. exchange rate controls