Suppose that an economy produces civilian goods and military goods. If technological breakthroughs increase its ability to produce military goods, then
a. fewer military goods will be produced
b. more civilian goods will be produced
c. the opportunity cost of producing military goods will rise
d. there will be productive inefficiency in the economy
e. the production possibilities frontier will pivot outward around the axis for military goods
E
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After the Fed sells a government bond, which of the following is the impetus for the money supply process that follows?
a. Banks now have excess reserves. b. Banks now have deficient reserves. c. Banks must print money to purchase the bonds. d. Banks now have to hold more required reserves. e. Banks now must be regulated closely.
Which of the following is true regarding the effect of deficits from 1980-2005 in the U.S.?
a. They did not lead to substantial inflation because the Fed did not monetize the deficits. b. They did not lead to substantial inflation because the Fed did monetize the deficits. c. They led to substantial inflation because the Fed did not monetize the deficits. d. They led to substantial inflation because the Fed did monetize the deficits.
Economists and psychologists are often on opposite sides of the economic growth debate. The nature of the debate is such that
A. economists emphasize the benefits of growth to finance valuable programs, and psychologists question whether more goods make people happier. B. economists emphasize that more money means more income for the government, and psychologists believe poorer people are happier. C. economists believe that economic growth imposes no serious costs on the economy, and psychologists question the statistical reliability of GDP numbers. D. economists stress the importance of money relative to leisure, and psychologists stress the importance of an unstructured life.
Which of the following statements is normative?
What will be an ideal response?