Assume that society is operating on its concave production possibilities frontier. As more and more units of the good on the horizontal axis are produced,
a. more and more total resources are employed in the two industries combined
b. larger and larger amounts of the good on the vertical axis must be sacrificed
c. fewer and fewer total resources are employed in the two industries combined
d. more and more units of the good on the vertical axis will be produced
e. smaller and smaller amounts of the good on the vertical axis must be sacrificed
B
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Which of the following backs our money supply?
a. The words "This note is legal tender." b. The faith in the government c. The faith that people will take it in exchange for goods and services d. Precious metals
Tax and spending policies affect aggregate demand only after some time elapses. Due to these time lags, fiscal policies end up getting based on
A. forecasts on the future state of the economy that are often inaccurate. B. forecasts on the present state of the economy that are often inaccurate. C. forecasts on the present state of the economy that are often accurate. D. all of these.
If the federal government sets a minimum price for wheat at $5.00 per bushel when the equilibrium price is $4.50, then
A) a surplus will be created causing the price to fall to the equilibrium price of $4.50. B) a permanent surplus will develop because the government established the minimum price at $5.00. C) a shortage will be created causing the price to rise to the equilibrium price of $4.50. D) a permanent shortage will develop because the government established the minimum price at $5.00.
If televisions are normal goods, a fall in income will
a. Increase the demand for cars b. Decrease the demand for cars c. Have no effect on the demand for cars d. None of the above