Given the information in the table above, Foreign's opportunity cost of cloth is

Sustained economic growth generally occurs when a nation

A) abandons the market system in favor of central economic planning. B) abandons the rule of law in favor of a series of licenses, regulations, and tariffs to control and protect the domestic economy. C) subsidizes loss-generating enterprises and thereby preserves jobs and incomes. D) creates conditions where people are free to specialize and exchange.

If workers and firms lower their inflation expectations,

A) unemployment will rise. B) the short-run Phillips curve will shift downward. C) the short-run Phillips curve will be vertical. D) actual inflation will fall to match expected inflation.