Through war, many of the factories in country 1 are destroyed and many of its people are killed. As a result, the country's
A) production possibilities frontier (PPF) after the war has probably shifted to the right compared to its PPF prior to the war.
B) PPF after the war has probably shifted to the left compared to its PPF prior to the war.
C) PPF after the war is probably the same PPF as before the war.
D) ability to produce goods and services has increased.
E) b and d
B
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Suppose an economy produces milk and honey, and milk is plotted along the horizontal axis of the production possibilities frontier
If the production in the economy is centrally planned (and not market oriented) so that the MRS for the current production level is 3 but the MRT is 2, then there will be an excess ________ for milk and an excess ________ for honey. A) demand, supply B) demand, demand C) supply, demand D) supply, supply E) The market is in equilibrium, and there are no imbalances in supply or demand.
If a decrease in the price of good A causes a decrease in demand for good B, the two goods are
A) substitutes. B) complements. C) normal. D) inferior.
The main reason for the decline in real wages in the 1970s and 1980s was
A. our high rate of productivity growth. B. our low rate of productivity growth. C. that so many housewives joined the labor force. D. people couldn't find jobs.
Based on the notation presented in Chapter 2, which of the following expressions represents nominal GDP?
A) Yt B) PtYt C) Yt/Pt D) $Yt/Pt