Suppose the economy goes from a point on its production possibilities frontier (PPF) to a point directly to the left of it. Assuming that the PPF has not shifted, this could be due to
What will be an ideal response?
the implementation of a new law that interferes with productive efficiency.
You might also like to view...
Which of the following is a consequence of free riders?
A. The government always steps in to produce the good or service. B. The good or service is produced regardless. C. The good or service is never produced because not enough people paid to use it. D. Consumers are better off by not having the good or service be produced.
Suppose that real GDP grows by 3 percent a year, the quantity of money grows 5 percent a year, and velocity does not change. In the long run, the inflation rate equals
A) 3 percent. B) 5 percent. C) 8 percent. D) 10 percent. E) 2 percent.
The assumption that nothing changes except the variables being studied is
A) the ceteris paribus assumption. B) the rationality assumption. C) positive economic analysis. D) normative economic analysis.
As a result of an expansionary monetary policy ________
a. both aggregate expenditure and aggregate demand increase b. both aggregate expenditure and aggregate demand decrease. c. aggregate expenditure increases and aggregate demand decreases. d. aggregate expenditure decreases and aggregate demand increases. e. aggregate expenditure remains unchanged; aggregate demand increases.