If a country is producing efficiently and is on the production possibilities frontier, the only way to produce more of one good is to produce less of the other
Indicate whether the statement is true or false
TRUE
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In a free market there are significant restrictions on how a good or service can be produced or sold
Indicate whether the statement is true or false
When a central bank sells bonds, cash reserves throughout the financial system increase, interest rates fall, and investment spending increases
Indicate whether the statement is true or false
Assuming perfect capital mobility and flexible exchange rates, then
a. monetary policy is ineffective while fiscal policy is highly effective. b. fiscal policy is completely ineffective while monetary policy is highly effective. c. both monetary policy and fiscal policy are effective. d. monetary policy is less effective than fiscal policy.
Price elasticity of demand is the responsiveness of
A) the quantity demanded to a change in price. B) demand to a change in supply. C) demand to a change in income. D) demand for a good to a change in the demand for another good.