The formation of a trade bloc necessarily improves well-being worldwide because it is a step toward free trade.

Tom is a U.S. citizen. He took up a job and moved to the U.K. His income will lead to a(n) ________

A) decrease in the GDP of U.K. B) increase in the GNP of U.K. C) increase in the GDP of U.S. D) increase in the GNP of U.S.

The effects of tax cuts or government spending dissipate and each additional change in consumption and income becomes smaller and smaller because

A) some of the increase in income will be lost through taxation. B) some of the increase is saved and does not result in an increase in consumer demand. C) some of the increase in consumption will be an additional demand for imported goods. D) All of the above. E) None of the above.