Governments often ________ activities that generate external ________.

The concept of comparative advantage leads to the conclusion that:

A) beneficial trade takes place if one country can produce everything more efficiently than another country. B) trade will benefit the two countries if the relative costs of production differ in the two countries. C) benefits from trade are possible only if all tariffs are eliminated. D) everyone benefits from increased trade both in the short run and the long run.

If economists forecast an increase in aggregate expenditure, which of the following is likely to occur?

A) GDP will fall. B) Wages will fall. C) Inventories will rise. D) GDP will rise.