A production possibilities frontier with constant opportunity cost is considered:
A) convex.
B) concave.
C) a straight line.
D) horizontal.
Ans: C) a straight line.
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Which of the following correctly describes the difference between M1 and M2?
a. M1 includes currency, coins, gold and silver, whereas M2 does not contain gold and silver. b. M1 is made up of currency, traveler's checks, and money in checkable accounts, whereas M2 contains M1 plus savings deposits, small-denomination time deposits, and money market mutual funds. c. M1 is limited to currency, whereas M2 contains M1 plus travelers checks and money in checkable accounts. d. M1 includes currency and traveler's checks, whereas M2 contains M1 plus money in checking accounts.
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
In economics, resources are also known as
A. factories. B. human capital. C. factors of production. D. minerals.
As you move down the production possibility frontier, the absolute value of the marginal rate of transformation
A. increases. B. initially decreases, then increases. C. decreases. D. initially increases, then decreases.