Which of the following events create an outward shift of the production possibilities curve?
a. The United States moves resources from the production of goods for domestic production to the production of goods for export.
b. Tax reductions reduce the cost and increase the volume of investment in factories, machinery, and research and development.
c. There is an exodus of young people to another country where there is more political freedom.
d. The unemployment rate falls from 33 percent to 12 percent.
b
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When the exchange rate, E, and the foreign price level, P*, is fixed, domestic inflation depends primarily on
A) amount of aggregate demand. B) home price level set by IMF. C) current account balance. D) government tax policy. E) foreign interest rates.
Sustained downward movements in the business cycle are referred to as
A) inflation. B) recessions. C) economic recoveries. D) expansions.
One should be wary of consultants peddling best practices or secrets to success because
a. They have different incentives than you do b. Such best practices are public knowledge and easily duplicated c. These best practices can at best only provide temporary profitability d. All of the above
Causality (what causes what) is clear and mechanical with the quantity theory of money. If M increases, with
a. V and Q being variable, the price level, P, increases b. V and Q being variable, the price level, P, decreases c. V and Q being constant, the price level, P, increases d. V and Q being constant, the price level, P, decreases e. P and Q being constant, velocity, V, increases