In order to explain how societies deal with the problem of scarcity, economists apply simplified representations known as
A. simplifying assumptions.
B. empirical tests.
C. normative questions.
D. models.
D. models.
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Technological innovations are not necessarily major scientific breakthroughs
Indicate whether the statement is true or false
Allocative efficiency refers to
A) producing the goods and services most highly valued. B) using the least amount of labor to produce output. C) producing the maximum possible amount of output. D) obtaining the least output with the most inputs. E) producing at any point on the PPF.
The ability of capital deepening by itself to generate sustained economic growth is limited because of the law of diminishing marginal returns
a. True b. False Indicate whether the statement is true or false
Refer to the above figure. If real GDP is $4 trillion, then
A. consumption expenditures are too low. B. unplanned inventories will increase. C. actual investment spending equals $1 trillion as planned investment spending plus unplanned inventory increases equal $1 trillion. D. unplanned inventories will decrease.