According to the Classical growth model, the most important source of economic growth is:

Product differentiation and internal economies of scale yield gains from trade in the form of

A) lower production costs and a greater variety of goods. B) higher profits and lower trade costs. C) the proximity-concentration effect. D) a proliferation of competitive firms. E) the substitution of immigration for foreign direct investment.

Because of a regulatory environment that encourages foreign participation and competition in financial services, the domestic markets in the __________ are not really distinct from the foreign markets

A) the United Kingdom B) the United States C) Japan D) Germany