Exhibit 2-15 Production possibilities curve
In Exhibit 2-15, the economy will experience the most future economic growth if it chooses what point now?
A. J.
B. K.
C. M.
D. N.
Answer: D
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Consider a nation with an endowment of iron ore and petroleum. If the nation specializes in the production of aluminum and gasoline instead of steel we can say that it is operating:
a. on its production possibilities curve. b. outside its production possibilities curve. c. inside its production possibilities curve. d. on the highest achievable production possibilities curve. e. on the lowest production possibilities curve.
Economies of scale: a. are the result of a diminishing marginal product
b. pertain to the long run only. c. refer to the increase in output that results from the increased utilization of a single input. d. imply that the average total cost curve will fall continuously as output increases in the short run.
The inflation rate reported in the news is usually calculated from the GDP deflator rather than the consumer price index
a. True b. False Indicate whether the statement is true or false
Discretionary fiscal policy is independent of Congress and based on the progressivity of the tax system.
Answer the following statement true (T) or false (F)