It is efficient to increase the output of computers if
a. society considers the extra computers more valuable than other goods foregone to produce the computers.
b. the opportunity cost of more computers is greater than their marginal utility.
c. computer production can be increased only if production of other goods is decreased.
d. the price of the computers is equal to their average cost.
a
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Government spending is a leakage out of the circular flow of income and spending
a. True b. False Indicate whether the statement is true or false
The elimination of import restrictions will
A. Redistribute income from import-competing industries to export industries. B. Redistribute income from domestic to foreign producers. C. Alter the mix of output from export industries to import-competing industries. D. Alter the mix of output from export industries toward domestic industries.
If the trade line that passes through the production point on the PPC has a slope that is shallower than the slope of the PPC at the same point, then
A) the country can get greater gains from trade if it moves production away from the vertical axis. B) the country can get greater gains from trade if it moves production toward the vertical axis. C) the country cannot improve on its gains from trade. D) There are no gains from trade in this example. E) There is not enough information to tell how it can improve its gains from trade.
If the required reserve ratio is .10, the demand deposit expansion multiplier is
A) .1. B) 4. C) 5. D) 10.