The "guns versus butter" dilemma that all nations confront is that
A. An increase in national defense implies more sacrifices of civilian goods and services.
B. Guns and butter can be produced using the same resources at the same time.
C. An increase in national defense is possible only if we produce more butter.
D. All of the choices are correct.
Answer: A
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An increase in imports increases aggregate demand
Indicate whether the statement is true or false
Economic models do all of the following except
A) simplify some aspect of economic life. B) answer economic questions. C) make economic ideas explicit and concrete for use by decision makers. D) portray reality in all its minute details.
Which of the following is most likely to be an inferior good? a. Porsches
b. Lobster. c. Used clothing. d. An Ivy League education.
Assume the central bank decides to raise the discount rate. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?
a. Start the analysis in the real credit market with supply of real credit shifting to the right. b. Start the analysis in the real goods market with aggregate demand shifting to the left. c. Start the analysis in the real credit market with demand for real credit shifting to the left. d. Start the analysis in the real credit market with demand for real credit shifting to the right. e. Start the analysis in the real credit market with supply of real credit shifting to the left.