What happens to a production possibilities frontier (with capital goods on the vertical axis and consumption goods on the horizontal axis) when there is technological improvement?
a. The entire frontier shifts outward.
b. The upper part shifts outward while the lower part shifts inward.
c. Nothing; there is no movement of the frontier.
d. The entire frontier shifts inward.
e. The lower part of the curve shifts outward while the upper part shifts inward.
A
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Real GDP is:
a) the nominal value of all goods and services produced in the economy. b) the nominal value of all goods and services produced in the domestic economy corrected for inflation or deflation. c) that aggregate output that is produced when the economy is operating at full employment. d) always greater than nominal GDP.
The present value of $1000 received 2 years from now given the current rate of interest
A. is less than the present value of $1000 received 1 year from now. B. is the same as $1000 received 3 years from today. C. is the same as $1000 received 1 year from today. D. is less than $1000 received 3 years from today.
A technological advance that increases labor productivity will:
A. decrease the demand for labor as MP falls. B. decrease the demand for labor as fewer workers are needed. C. decrease the supply of labor as fewer workers are needed. D. increase the demand for labor as MP rises.
A normal good is one:
What will be an ideal response?