If a country is currently producing inside its production possibilities curve
A) it can increase the production of both goods by putting unemployed resources to work.
B) it can increase the production of one of the goods only if it reduces the production of the other good.
C) it is experiencing efficient production of one good but not the other.
D) None of the above are correct.
Answer: A
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The mound-shaped yield curve in the figure above indicates that short-term interest rates are expected to
A) rise in the near-term and fall later on. B) fall moderately in the near-term and rise later on. C) fall sharply in the near-term and rise later on. D) remain unchanged in the near-term and fall later on.
The labor demand curve of an imperfectly competitive seller is downsloping:
A. solely because of diminishing marginal utility. B. because of both diminishing returns and the necessity to lower price to sell more output. C. solely because product price must be reduced to sell more output. D. solely because of diminishing returns.
Government-imposed quantity restrictions
A) generate a higher price for the good than would prevail under freely competitive markets. B) generate a lower price for the good than would prevail under freely competitive markets. C) does not affect the price of the good because quantity restrictions always ban sale of the good completely. D) can cause prices to either be higher or lower, but always cause excess quantities supplied to develop.
(Last Word) Which of the following is a concern about the consequences of ZIRP, QE, and Operation Twist?
A. Increased government borrowing to fund deficit spending. B. Increased taxes to pay for the monetary stimulus. C. The stimulus to aggregate demand would be too sudden and result in runaway inflation. D. The weakening of the U.S. dollar would worsen the U.S. trade balance.