At which time is the opportunity cost likely to be higher to go to war, during a recession or during an economic boom? Explain your answer fully
What will be an ideal response?
It is likely that going to war during an economic boom is more costly because many men and women who join the military or are drafted will more than likely be leaving behind a productive job. The rest of the country will experience a permanent sacrifice in terms of all the goods and services that will not be produced by them. During a recession many men and women are without jobs so the opportunity cost of deploying them in war is lower.
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A budget line can show all butoneof the following statements below. Which one does itnotshow?
A. The budget line shows the available choices to a household. B. It is a curve of constant expenditure. C. The slope of the budget line increases as the quantity of a good consumed increases. D. The budget line shows how much it costs to purchase a combination of two goods, for a set income and prices.
When the Phillips curve was first formulated (late 1960s), many economists thought that it showed a
A. “menu” of budget deficits from different budget policies. B. “menu” of possible choices available to policymakers. C. guide to the appropriate mix of fiscal and monetary policy. D. guide of political reactions to economic policy.
If an investment has a 20% (0.20) probability of returning $1,000; a 30% (0.30) probability of returning $1,500; and a 50% (0.50) probability of returning $1,800; the expected value of the investment is:
A. $1,433.33 B. $1,600.00 C. $1,550.00 D. $2,800.00
The LM curve illustrates all combinations of domestic output levels and interest rates for which
A. the domestic money market is in equilibrium. B. there is a zero balance for the country's official settlements balance. C. there is full employment. D. the domestic product market is in equilibrium.