Refer to the figure shown, which represents the production possibilities frontiers for Countries A and B. Considering both country's production possibilities frontiers, we know that would both agree to terms of trade of one truck to:
A. eight cars.
B. two cars.
C. six cars.
D. four cars.
Answer: D
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If the Federal Reserve unexpectedly increases the money supply, which of the following will most likely happen in the short run?
a. real GDP will rise. b. real GDP will fall. c. real interest rates will rise. d. the budget deficit will rise.
In perfectly inelastic supply, the quantity doesn't change which means . . . No deadweight loss and no underproduction
What will be an ideal response?
A recession occurs when ________, when ________, or when both of these occur.
A. potential output grows rapidly; actual output equals potential output B. potential output grows rapidly; actual output falls below potential output C. potential output grows slowly; actual output rises above potential output D. potential output grows slowly; actual output falls below potential output
In principle, a cap-and-trade program would
A) cause firms to generate more pollution than their allowed limits. B) cause firms to generate less pollution than their allowed limits. C) raise the production costs of all firms. D) lower the production costs of all firms.