In terms of the production possibility frontier, an increase in productivity attributable to new technology would best be shown by
A. a movement from a point inside the frontier to a point on it.
B. a movement along the frontier.
C. the production possibility frontier shifting outward, away from the origin.
D. a movement toward the origin.
Answer: C
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If a firm that uses a production process that yields economies of scale charges a price equal to ________, then profit will be ________
A) marginal cost; negative B) marginal revenue; maximized C) marginal cost; maximized D) marginal revenue; positive E) marginal cost; positive
An increase in capital inflows will
A) increase the equilibrium exchange rate. B) increase net foreign investment. C) increase capital outflows. D) decrease capital outflows.
Assuming no change in the effective tax rate on capital, an increase in the government budget deficit will reduce the current account deficit if and only if the increase in the budget deficit
A) reduces desired national saving. B) increases desired national saving. C) reduces desired national investment. D) increases desired national investment.
In a given year, U.S. nominal GDP was $2,784 billion and the GDP chain price index for that year is 60.4 . Real GDP is:
a. $1,682 billion. b. $4,609 billion. c. $3,889 billion. d. $4,000 billion.