In order for Ethiopia to increase its future economic growth, it must choose a point that is:
a. further along on its production possibilities curve toward the capital goods axis.
b. above its production possibilities curve.
c. below its production possibilities curve.
d. further along on its production possibilities curve toward the consumption goods axis.
a
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In the short run, if the economy is at full employment, then the quantity of real GDP
A) is equal to potential GDP, and the unemployment rate is equal to the natural unemployment rate. B) does not necessarily equal potential GDP, but the unemployment rate is equal to the natural unemployment rate. C) is equal to potential GDP, but the unemployment rate does not necessarily equal the natural unemployment rate. D) is equal to potential GDP, but the unemployment rate is less than the natural unemployment rate. E) exceeds potential GDP, and the unemployment rate is less than the natural unemployment rate.
Assume a country is required by law to balance the budget every year. Suppose aggregate demand falls, causing a recession and a budget deficit
To balance the budget, what would the government need to do with the level of government spending and taxes? How would these changes in government spending and taxes affect aggregate demand and the economy?
Saving is a leakage from the circular flow. Why didn't the classical economists think saving might cause consumption expenditures to fall short of total output?
What will be an ideal response?
The ability of an individual to own and exercise control over scarce resources is called
a. market failure. b. property rights. c. externality. d. market power.