The production possibilities frontier is a diagram that shows:
a. the productively efficient combinations of two products that an economy can produce given the resources it has available.
b. the productively efficient combinations of two products that can be produced on a worldwide basis given demand.
c. the productively inefficient combinations of a single product that an economy can produce given the resources it has available.
d. the productively efficient combinations of two products that an economy can produce regardless of if the resources are available.
a. the productively efficient combinations of two products that an economy can produce given the resources it has available.
The production possibilities frontier is a diagram that shows the productively efficient combinations of two products that an economy can produce given the resources it has available.
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What two measures of macroeconomic activity are often referred to as the "twin deficits"?
A) the budget deficit and the trade balance B) net capital flows and net exports C) the foreign exchange deficit and net foreign investment D) the saving-investment deficit and the export deficit
If AD increases at a faster rate than AS, the result will be
a. demand-side inflation. b. supply-side inflation. c. falling prices. d. stable prices.
Refer to Exhibit 6-2. How many persons are unemployed in year 2?
a. 200 million b. 50 million c. 75 million d. 175 million e. 100 million
If an economy is in a recession and the government opts for an expansionary fiscal policy to shift the AD curve closer to potential output, an economist with a typical functional finance view, who acknowledges partial crowding out, would conclude that the AD curve:
A. does not shift since the higher government spending is offset by lower private consumption. B. does not shift since the higher government spending is offset by higher private consumption. C. shifts to the right due to higher government spending. D. shifts to the left due to higher government spending.