Three different economies have made choices about the production of capital goods. Which of the following is most likely to produce the greatest growth in the production possibilities curve (PPC)?
a. Less production of capital goods than what is needed to replace worn-out capital.
b. Greater production of capital goods than what is needed to replace worn-out capital.
c. Capital goods are produced at rate needed exactly to replace worn-out capital.
d. More production of consumption goods that replace worn-out capital.
b
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Spending on financial assets ________ counted as part of GDP ________
A) are not; because their purchase is not spending on goods or services B) are; as long as their purchase produces income C) are; because the cash exchanged represents an expenditure D) are not; because interest must be paid on them E) may be; as long as their value increases
If marginal profit is negative when the firm produces one more unit, then the firm is currently maximizing profits.
Answer the following statement true (T) or false (F)
When the price of wood (which is an input in the production of furniture) falls, the consumer surplus associated with the consumption of furniture
A) increases. B) decreases. C) does not change. D) could be any of the above.
In the above figure, suppose the economy is initially at a short-run equilibrium at point D and there is an unanticipated increase in the money supply. Which point represents the new short-run equilibrium?
A) A B) B C) C D) D