Reductions in available resources will cause the production possibilities curve to:
a. expand. b. disappear.
c. become vertical. d. shift inward.
d
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When drawn against the real interest rate, output supply increases if
A) current government expenses increase. B) future government expenses increase. C) current total factor productivity increases. D) the money supply increases.
Which of the following best describes the income velocity of money?
A) V = PMs B) V = Y C) V = PY/Ms D) V = Ms/PY
The cross elasticity of demand is
A) the percentage change in the demand of one good divided by the percentage change in price of another good. B) the change in the price of one good divided by the change of quantity demanded of another good. C) the percentage change in the quantity demanded of one good divided by the percentage change in the quantity demanded of another good. D) the percentage change in the price of one good divided by the percentage change in the price of another good.
The business activities of Firm A confer positive externalities on Firm B, and the business activities of Firm B confer positive externalities on Firm A. If the two firms merged, then
a. their respective markets would move closer to the social optimum. b. their respective markets would move further away from the social optimum. c. total surplus in their respective markets would decrease. d. the merger would serve as an example of a misguided public policy toward externalities.