One reason why we might want to impose restrictions on free trade is to protect infant domestic industry in the formative stages of development and thus unable to compete yet on world markets.
a. True
b. False
Indicate whether the statement is true or false
Question 2
Using the aggregate expenditures model, if aggregate expenditures (aggregate demand) is 10 trillion and aggregate output is 10.3 trillion:
a. businesses will accumulate inventories, and output will decline.
b. real output will increase if the full-employment capacity of the economy is greater than 10.3 trillion.
c. inflation will be a problem if the full-employment capacity of the economy exceeds 10.3 trillion.
d. both b and c are correct.
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