A country's production possibilities will grow if it
a. produces more guns than butter.
b. lowers its opportunity costs.
c. makes more trade-offs.
d. increases its resources.
Ans: d. increases its resources.
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A decrease in expected returns on investment will most likely shift the AD curve to the ________.
A. right because Ig will increase B. left because C will decrease C. left because Ig will decrease D. right because C will increase
Refer to Figure 12-9. At price P2, the firm would produce
A) Q2 units. B) Q3 units. C) Q4 units. D) zero units.
Which one of the following is/are INCORRECT? An argument against floating exchange rates is that
A) a fixed rate automatically prevents instability in the domestic money market from affecting the economy if shocks come from home domestic money market. B) a fixed rate might become unpredictable, complicating economic planning. C) a rise in money demand under a fixed exchange rate would have no effect on the exchange rate and output. D) a fixed rate functions within the price-specie-flow mechanism and maintains a balance of payments equilibrium. E) a fixed rate automatically prevents instability in the economy from output market shocks.
If an event is unlikely to occur, which probability is a reasonable estimate?
A) 0 B) 0.23 C) 0.82 D) Not enough information to determine.