Which of the following would shift the production possibilities frontier outward?
a. an increase in the size of the labor force
b. more efficient use of existing resources and technology
c. the government prints more money
d. the end of a strike by a labor union
e. society's desire to produce more of one of the goods
A
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Friedman and Phelps suggested that there should not be a stable relationship between inflation and unemployment, but there should be a stable relationship between
A) anticipated inflation and frictional unemployment. B) anticipated inflation and cyclical unemployment. C) unanticipated inflation and frictional unemployment. D) unanticipated inflation and cyclical unemployment.
One of the merits of plurality voting is:
A. its simplicity. B. it has all four criteria for an ideal voting system. C. it guarantees the best option will win. D. it produces a result that most participants are happy with.
During 2001-2004, the Fed injected additional reserves into the banking system, which reduced the federal funds rate and other short-term interest rates. Other things constant, what is the most likely short-run impact of this policy?
a. an increase in the rate of unemployment b. a reduction in the growth of employment c. an increase in aggregate demand and real GDP d. a reduction in the long-run rate of inflation