The production possibilities curve represents which of the following?
a. the amount of goods attainable with variable resources.
b. the maximum amount of goods attainable with variable resources.
c. the maximum combinations of goods attainable with fixed resources.
d. the amount of goods attainable if prices decline.
Answer: c. the maximum combinations of goods attainable with fixed resources.
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Under the adaptive method of estimating expected sales in the simple acceleration theory, if a firm's actual sales increase,
A) expected sales will increase if j is greater than zero. B) expected sales will remain the same if j equals zero. C) expected sales will equal the previous period's actual sales if j equals one. D) All of the above are correct.
An example of a ________ would be the government setting the price of coffee below the equilibrium price.
A. black market B. rational expenditure C. price ceiling D. non-income tax
If the marginal propensity to consume is ________, then a $2 trillion increase in disposable income increases consumption expenditure by $1.2 trillion. If the marginal propensity to consume is ________, then a $2 trillion increase in disposable income increases consumption expenditures by $1.6 trillion.
A) 0.6; 0.8 B) 1.67; 2.25 C) 1.2; 1.6 D) 6.0; 8.0 E) None of the above because a $2 trillion increase in disposable income always leads to a $2 trillion increase in consumption expenditure.
The value of a model is determined by
A) the usefulness of its predictions in the real world. B) the extent of the profit earned by applying it. C) the realism of its assumptions. D) the model's attention to real world details.