External balance refers to
A) an economy which is on its LM curve.
B) an economy which is on its IS curve.
C) an economy which is on its BP curve.
D) All of the above.
Question 2
An industry is characterized by scale economies and exists in two countries. In order for consumers of its products to enjoy both lower prices and more variety of choice
A) the two countries must engage in international trade with each other.
B) each country's marginal cost must equal that of the other country.
C) the marginal cost of this industry must equal marginal revenue in the other.
D) the monopoly must lower prices in order to sell more.
E) they must combine to become a multinational corporation.
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