Refer to Figure 24-4. In the figure above, AD1, LRAS1 and SRAS1 denote AD, LRAS and SRAS in year 1, while AD2, LRAS2 and SRAS2 denote AD, LRAS and SRAS in year 2

For economic growth to increase living standards

A. society must acquire more resources. B. the rate of growth must exceed the rate of population increase. C. society must discover ways of using available resources more efficiently. D. the choices available to consumers must increase.

European Union subsidizes its farmers. How do these subsidies make it difficult for farmers in developing economies to compete in the world farm market?

A. The subsidies shift the supply of EU farm goods to the right, lowering world prices of farm goods and the price developing country farmers can receive for their produce. B. The subsidies function as a tariff, causing imports from developing countries to become artificially expensive, thus denying European consumers the benefits of cheap imported food C. The subsidies set a price ceiling for EU farm goods, keeping prices below the market equilibrium, and lowering the price developing country farmers can receive for their produce. D. The subsidies create ethical problems for Europeans who want to buy farm products from developing countries since the subsidies are raising the price of developing country produce.