A production possibilities curve graphically represents the maximum quantities of two products produced when all resources in the economy are efficiently utilized. An economy that operates inside this production possibilities curve
a. is using its resources inefficiently.
b. lacks the necessary technology to produce efficiently.
c. lacks the resources to produce goods efficiently.
d. is utilizing its available resources as efficiently as possible.
A
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Depreciation of the Japanese yen would lead to
A. outward shift in the aggregate supply curve for Japan. B. upward shift in the aggregate demand curve for Japan. C. downward shift in the aggregate supply curve for Japan. D. inward shift in the aggregate demand curve for Japan.
In which model does there not exist a tradeoff between higher inflation and lower unemployment?
a. monetarist b. real business cycle c. new classical d. classical e. a tradeoff exists in all of the above
Which of the following is an accurate statement about the fallacy of composition?
a. Group plans are often thwarted by individual behavior. b. Individual behavior is easier to predict than group behavior. c. The motivation for individuals changes when they become part of a group. d. Individual truth and group truth are often different.
If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output. B. lower price level and lower level of output. C. higher price level and higher level of output. D. lower price level and higher level of output.