How are trade offs illustrated by the production possibilities curve? Consider the case of Federal government spending on national defense and spending on social programs
Please provide the best answer for the statement.
In the production possibilities model, an increase in government spending on national defense will come at the expense of government spending on social programs. If the nation wants to be more secure then it will have to give up the opportunities to use its scarce budget resources for social programs. Conversely, if there is more spending on social programs, there will have to be cuts to national defense, assuming that there is a fixed budget constraint. Moving in either direction on the production possibilities curve will involve trading off one desirable public good for another.
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An educated populace contributes to economic growth because
A) schools provide many jobs for teachers. B) education allows workers to develop skills that increase their productive capabilities. C) educated people are more likely to live in poverty. D) educated people understand the importance of protectionism.
Where interdependence is especially pronounced, competition among oligopolists will
a. resemble military tactics and strategies. b. disappear. c. lead to large increases in product output. d. entice more firms to enter the market.
Contractionary monetary policy _____ consumption and _____ investment spending.
a) increases; increases b) decreases; increases c) increases; decreases d) decreases; decreases
If the Congress passes legislation to decrease government spending to control demand-pull inflation, then this would be an example of:
A. a contractionary fiscal policy. B. automatic stabilizers. C. a nondiscretionary fiscal policy. D. an expansionary fiscal policy.