Economic growth causes a production possibilities frontier to shift outward
a. True
b. False
Indicate whether the statement is true or false
True
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As the electronic components industry expands, the salaries paid to electrical engineers rise in response to higher demand. We can conclude that the electronic components industry is:
a. a constant-cost industry. b. an increasing-cost industry. c. a decreasing-cost industry. d. a marginal-cost industry.
Higher rates of interest increase the opportunity cost of holding money balances
a. True b. False Indicate whether the statement is true or false
Which of the following is an example of an automatic stabilizer?
a. public works b. unemployment compensation c. interest rates d. highway spending
Suppose that a chair in Germany sells for 100 euros. The exchange rate changes from $1 = 1 euro to $1 = 4 euros. How does this change affect the equivalent U.S. dollar price of the chair?
a. The price decreases from $100 to $25. b. The price increases from $100 to $400. c. The price decreases from $400 to $100. d. The price increases from $25 to $400