All points on the production possibilities frontier
A) are production inefficient.
B) achieve allocative efficiency.
C) are production efficient but only one point achieves allocative efficiency.
D) are allocatively efficient but only one point achieves production efficiency.
E) are allocatively inefficient.
C
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Refer to the above table. Assuming constant opportunity costs, the opportunity cost of producing a computer in the United States is ________ while the opportunity cost of producing a computer in Mexico is ________
A) 0.8 bicycle; 2 computers B) 2.5 computers; 0.25 bicycle C) 0.5 bicycle; 0.2 bicycle D) 2 bicycles; 5 bicycles
The multiplier is defined as:
A. 1 - MPS. B. change in GDP × initial change in spending. C. change in GDP/initial change in spending. D. change in GDP - initial change in spending.
Deviations from interest rate parity occur due to
A) transaction costs. B) government controls. C) political risk. D) All of the above.
Risk taking
A. is economically wasteful. B. is a cause of income inequality. C. is not a cause of income inequality. D. evens out income inequality because of the bell curve.