Suppose that the production function for an economy is graphed with Real GDP on the vertical axis and labor on the horizontal axis. When the level of capital in this economy rises, it causes ____________________which shifts the LRAS curve ____________ resulting in ______________________
A) a movement down along a given production function; leftward; a shrinking economy
B) the production function to shift downward; leftward; a shrinking economy
C) a movement up along a given production function; rightward; economic growth
D) the production function to shift upward; rightward; economic growth
D
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When an economy is producing inside its production possibility frontier,
A. production inefficiency occurs. B. it is efficient so long as it is producing what people want. C. only technological advances will allow it to increase production. D. it must overcompensate by producing outside the curve to achieve efficiency.
Refer to Figure 6-12. The diagram shows two supply curves, SA and SB. As price rises from P0 to P1, which supply curve is more elastic?
A) They are equally inelastic. B) SB C) They are equally elastic. D) SA
In the United States, who determines the combination of bond and money creation that finances the federal budget deficit?
A) the federal government itself B) the Federal Reserve C) the private banking system D) private bond- and money-holders
By the accelerator hypothesis, if a firm's actual sales jump in one period to a higher maintained level, that firm's gross investment
A) also jumps in one period to a higher maintained level. B) gradually drifts upward to a higher maintained level. C) jumps upward and then falls back to zero. D) jumps upward and then falls back part of the way.