What experiences have developing countries had with trade blocs?
What will be an ideal response?
POSSIBLE RESPONSE: Developing countries have had diverse experiences with trade blocs. In 1960 Mexico and South America created the Latin American Free Trade Agreement. The hopes were that this customs union would create a market large enough to support large-scale producers in each modern manufacturing sector by protecting this market from competitors from industrialized nations. Yet, the Latin American countries lacked binding commitment to free international trade, and by 1969 the union split into small groups with minimal bilateral agreements. Some Caribbean states and the East African Community (Kenya, Tanzania, and Uganda) had similar experiences with unstable agreements. Later attempts to form trade blocs in Latin America were more successful. In 1991, Argentina, Brazil, Paraguay, and Uruguay formed MERCOSUR (the Southern Common Market), which is among the most prominent of the current developing country blocs.
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Refer to the figure below. When the price is equal to 8, the price elasticity of demand for the demand curve D1 is ________ and for D2 the price elasticity of demand is ________. 
A. 1; 4 B. 4; 1 C. 2; 4 D. 4; 4
Which of the following always lowers the equilibrium price?
A) an increase in both demand and supply B) a decrease in both demand and supply C) an increase in demand combined with a decrease in supply D) a decrease in demand combined with an increase in supply
Refer to Figure 13-4. 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
Given the economy is at point A in year 1, what is the actual growth rate in GDP in year 2? A) 2.5% B) 7.3% C) 8.0% D) 10.0%
How does expansionary monetary policy increase spending in the economy compared to how expansionary fiscal policy increases spending in the economy?
What will be an ideal response?