Answer the following statement(s) true (T) or false (F)
1. The production possibilities curve highlights the concept of trade-offs
2. An economy operating inside the production possibilities curve is efficient.
3. Misallocation of resources can lead to inefficiency.
4. If an economy uses all its resources efficiently, it will operate at a point beyond its current production possibilities curve.
1. True
2. False
3. True
4. False
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How did production improvements like an assembly line help the production of Model T cars?
A. decreased the supply of Model T cars B. decreased the demand for Model T cars C. increased the demand for Model T cars D. increased the supply of Model T cars
In the two-period model with asymmetric information, a one-unit increase in the real rate of interest on bank deposits
A) causes the real loan interest rate to increase by more than one unit. B) causes the real loan interest rate to increase by less than one unit. C) cause the real loan interest rate to decrease by less than one unit. D) causes the real loan interest rate to decrease by more than one unit.
A country can gain by importing a good from abroad even if that good can be produced more efficiently at home. Is this statement true?
The change in the quantity of aggregate output demanded depends on how much the aggregate expenditure line shifts, not on which spending component causes the shift
Indicate whether the statement is true or false