Opportunity costs arise due to
a. Resource scarcity
b. Interest rates
c. Limited wants
d. Preferences
a
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Assume that the full-employment level of output is $500, and the price level associated with full-employment output is 100. Also assume that the economy's current level of output is $450 and, at the price level of 100, current aggregate demand is $400. If the government wants to move the economy back to the full-employment level of output and the MPC is 0.75, then it should
A. reduce government purchases by $25. B. increase government purchases by $25. C. increase government purchases by $100. D. reduce government purchases by $100.
A "market" is an arrangement that allows people to exchange things
Indicate whether the statement is true or false
When the rate of interest rises, the resulting change in the demand for capital is shown graphically by:
a. a movement down along the demand curve. b. a rightward shift of the demand curve. c. a leftward shift of the demand curve. d. a movement up along the demand curve. e. an outward rotation of the demand curve.
Assuming the economy in the graph shown is currently at equilibrium A, we can conclude:
A. there must be unemployment of resources. B. the economy is in a recession. C. the economy is producing less than its potential level of output. D. All of these are true.