The main reason why one nation trades with another is to
A. save its natural resources from rapid depletion.
B. exploit the advantages of specialization.
C. eliminate the danger of retaliation from other nations.
D. improve political alliances.
Answer: B
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The social cost is negative in case of a negative externality
a. True b. False Indicate whether the statement is true or false
Keynesians are more likely to propose
A) contractionary monetary policy to eliminate an inflationary gap than expansionary monetary policy to eliminate a recessionary gap. B) contractionary monetary policy to eliminate a recessionary gap than contractionary monetary policy to eliminate an inflationary gap. C) expansionary monetary policy to eliminate a recessionary gap than contractionary monetary policy to eliminate an inflationary gap. D) none of the above; instead, Keynesians are as likely to propose expansionary monetary policy to eliminate a recessionary gap as they are to propose contractionary monetary policy to eliminate an inflationary gap.