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.
c
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To be a member of the Internal Monetary Fund a nation must deposit funds based on
A) the need to loan money to developing nations. B) its national income. C) the amount of funds it wants to deposit. D) rules set up by the World Bank.
The quantity theory of money is based on the formula that
A) V = P*Y*Ms. B) Y = P*V/Ms. C) Ms= P*V/Y. D) P = Ms*V/Y.
In general, lower marginal tax rates provide incentives to
A. Produce more output. B. Work less. C. Find more tax loopholes. D. Invest less.
Which government program would be considered an "entitlement" program?
A. subsidies for mass transportation B. national defense C. law enforcement in major U.S. cities D. Social Security