Refer to the information provided in Figure 31.1 below to answer the question(s) that follow.
Figure 31.1Refer to Figure 31.1. Economic growth is represented by
A. a movement from Point A to Point B along ppf1.
B. a shift in the production possibilities frontier from ppf2 to ppf3.
C. a movement from Point C to Point B.
D. a movement from Point B to Point A.
Answer: B
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Suppose inflation comes in the form of an across-the board increase in all prices by some percentage k. For a consumer with exogenous income operating in a 2-good world, this will cause the budget constraint to
A. rotate inward B. rotate outward C. shift out in a parallel way D. shift inward in a parallel way E. none of the above
Exhibit 9-3 Keynesian aggregate expenditures model
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As shown in Exhibit 9-3, if GDP is $6 trillion, the economy experiences unplanned inventory:
A. depletion of $2 trillion. B. depletion of $6 trillion. C. accumulation of $2 trillion. D. accumulation of $6 trillion.
Describe how the substitution effect and the income effect influence decisions
What will be an ideal response?
If a firm offers a senior citizen discount,
A) the firm expects the average senior citizen to have a lower price elasticity of demand. B) the firm expects the average senior citizen to have a higher price elasticity of demand. C) senior citizens may be offended. D) it may be prosecuted for discrimination.