The consumption possibilities curve shows the combinations of goods that can be
A) consumed by a nation after trading begins. B) produced by a nation after trade begins.
C) produced by a nation before trading begins. D) consumed by a nation before trade begins.
A
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As part of the "exchange rate effect of monetary policy," a lower money supply causes a __________ interest rate and thus __________ of the domestic currency
A) higher; appreciation B) higher; depreciation C) lower; appreciation D) lower; depreciation
When external benefits are present in a market,
a. less of the good will be produced than the amount consistent with economic efficiency. b. more of the good will be produced than the amount consistent with economic efficiency. c. the amount of the good produced will be equal to the amount consistent with economic efficiency. d. corresponding external costs are always generated.
In the basket of goods that is used to compute the consumer price index, which of the following categories of consumer spending is the largest?
a. education & communication b. recreation c. medical care d. All of the above categories are about equal in magnitude.
Suppose current government spending decreases and that individuals expect future government spending to decrease. Given this information, in which of the following cases will output in the current period be more likely to decrease?
A) Individuals consider only the short run effects of changes in future macro variables when forming expectations of future output and future interest rates. B) Individuals consider only the medium run effects of changes in future macro variables when forming expectations of future output and future interest rates. C) Individuals consider only the long run effects of changes in future macro variables when forming expectations of future output and future interest rates. D) The output effects will be the same in B and C.