Refer to the information provided in Table 20.1 below to answer the question(s) that follow. Table 20.1
Refer to Table 20.1. In Guatemala, the opportunity cost of 1 bushel of oranges is
A. 1/2 bushel of bananas.
B. 1 bushels of bananas.
C. 2 bushels of bananas.
D. 4 bushels of bananas.
Answer: C
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The value of U.S. imports is ________.
A. added to exports when calculating GDP, because imports reflect spending by Americans B. subtracted from exports when calculating GDP, because imports do not constitute production in the United States C. subtracted from exports when calculating GDP, because imports do not constitute spending by Americans D. added when calculating GDP, because imports do not constitute production in the United States
As an economic concept, scarcity applies to
A) both money and time. B) money but not time. C) time but not money. D) neither time nor money.
Which of the following helps explain why real GDP is inversely related to the price level within the framework of the AD-AS model?
a. As prices fall, domestic consumers have an incentive to buy more of the cheaper goods and services. b. As prices fall, the monetary authorities will have to increase the money supply, which will lead to an increase in the quantity of goods and services purchased. c. As prices fall, the government will have to reduce taxes, which will lead to an increase in the quantity of goods and services purchased. d. As prices fall, the wealth of people holding the fixed quantity of money increases, causing them to expand their purchases of goods and services.
A production possibilities frontier (PPF) is bowed outward when
a) the more resources the economy uses to produce one good, the fewer resources it has available to produce the other good. b) an economy is self-sufficient instead of interdependent and engaged in trade c) the rate of tradeoff between the two goods being produced is constant d) the rate of tradeoff between the two goods being produced depends on how much of each good is being produced