The first alternative is correct.
Political economy can often be conflicting.
The main instruments of economic policy are monetary policy and fiscal policy. Both can be used to stimulate or discourage the economy. In this way, when they are adopted with the opposite sign, they are an example of conflict, as described in this exercise.
If the government wants to stimulate the economy through increased spending (expansionary fiscal policy), it will be injecting money into the economy. However, the main cause of inflation is excess currency in circulation. Thus, a contractionary monetary policy aims to wipe out the supply of money to contain inflation. That is, the first measure is inflationary to stimulate the economy, but the second is anti-inflationary, however contractionary.
<em>"Suppose the government and the Federal Reserve have conflicting goals. The government wants to encourage economic growth by </em><em>increasing spending</em><em>, but the Federal Reserve wants to decrease inflation by </em><em>decreasing the money supply</em><em>".</em>
<h2>The geography of India greatly influenced the location of early settlements on the subcontinent. Both the Indus and the Ganges rivers carried rich silt from the mountains to the plains. When the rivers flooded, the silt spread over the plains and made the soil in the river valleys fertile for farming, In ancient civilizations, geography affected them in so many ways, like the climate, resources, and the landscape that they use, The mountains provided them with protection against invasions, but the mountains were also used for trading with other to get the resources that they needed.</h2>
Letter A and Letter D are correct.
Comparative advantage is the ability of a country to produce services and goods for a lower opportunity cost if compared to its trade partners. The Comparative Advantage Theory states that a country should always specialize in the production of products or services that have a lower opportunity cost for them.<u> In this situation, Country A has a comparative advantage in the production of computer, therefore Country B should import computers from country A.</u>
