If current aggregate expenditure equals current production, an economy is in equilibrium

The twosector (manufacturing and agriculture) specific factors model assumes:

a. that there are increasing returns to labor. b. that there are diminishing returns to labor. c. that there are diminishing returns to capital in the agricultural sector. d. that there are diminishing returns to land in the manufacturing sector.

A "risky" asset will earn a rate of return close to that of "riskless" assets if its risk is

A) nondiversifiable. B) diversifiable. C) nominal, as opposed to real. D) related to the rate of inflation. E) no greater than the risk of similar assets.