Which of the following characteristics of a PPF indicates that tradeoffs must be made?
a. the downward slope
b. the upward slope
c. the constant slope
d. the curvature
a
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A nation engaging in trade according to the Ricardian model will find its consumption bundle
A) inside its production possibilities frontier. B) on its production possibilities frontier. C) outside its production possibilities frontier. D) inside its trade-partner's production possibilities frontier. E) on its trade-partner's production possibilities frontier.
Suppose there is a decrease in aggregate demand. If the Fed wants to stabilize output it could
a. buy bonds. These purchases also move the price level closer to its original level. b. buy bonds. However these purchases move the price level farther from its original level. c. sell bonds. These sales also move the price level closer to its original level. d. sell bonds. However these sales move the price level farther from its original level.
A nation's production possibilities curve is bowed out from the origin because:
A. resources are not generally equally efficient in producing every good. B. the originator of the idea drew it this way and modern economists follow this convention. C. resources are scarce. D. wants are virtually unlimited.
A bowed Production Possibilities Curve (PPC) indicates
A) inefficient production. B) that the trade-off between the 2 goods is not constant. C) changing technology. D) only 1 good is always being produced.