Consider an economy that is in short-run equilibrium with unemployment below the natural rate. According to the passive approach, low unemployment will eventually cause wages to fall, lowering the firms' cost of doing business

A reduction in the cost of cable TV subscriptions will ________ the ________ for televisions

A) decrease; supply B) decrease; demand C) increase; supply D) increase; demand E) None of the above is correct.

Trade in services such as information technology

A) is like other trade, it creates winners and losers, but the gains for national economies likely outweigh the costs. B) creates gains for India's economy, but national welfare losses for the countries that import these services. C) make it highly likely that information technology jobs will ultimately disappear in the industrialized countries. D) is not perceived as threatening by industrialized countries so is unlikely to lead to any protectionist sentiment or pressures in the way the manufacturing does.