Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.

Refer to the production possibilities frontier in the figure above. If the country moves from point a to point c, the opportunity cost of the move is

A) 30 million capital goods. B) 20 million capital goods. C) 10 million capital goods. D) 10 million consumption goods.

If Gambinia has many workers but very little land and even less productive capital, then, following the Heckscher-Ohlin model, in order to improve the country's economic welfare, the Gambinian government should

A) engage in free trade. B) protect the capital-intensive product. C) protect the land-intensive product. D) protect the labor-intensive product. E) discontinue all international trade.