Technology
A) is constantly changing at every point along a production possibilities curve.
B) is the recipe for combining land, labor, physical capital, and entrepreneurship to produce a good.
C) does not have an effect on the amount of a good a society can produce with its given resources.
D) only changes if resources change.
Answer: B
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The effects of tax incentive programs such as IRAs and 401(k) accounts suggest that these government programs designed to increase saving lead to
A) a decrease in the private capital stock. B) decreased labor productivity. C) an increase in the standard of living. D) an increase in the real interest rate.
Which of the following leads to a fundamental difficulty for stabilization policy?
a. Time lags in policy decisions b. Presence of shock absorbers in the economy c. Absence of data on the effectiveness of policy measures d. Existence of self-correcting mechanism
According to Keynes, which of the following should the government do when the economy overheats?
A. Practice laissez faire policies. B. Raise taxes. C. Employ more people. D. Increase spending.
The country of Eggville uses eggs as its official form of currency. All prices in Eggville are shown in terms of eggs, and residents carry around baskets of eggs to buy goods and services. Residents, however, cannot save eggs because they end up spoiling. Which functions of money do eggs serve?
a) Medium of exchange and store of value. b) Unit of account and store of value. c) Medium of exchange and unit of account. d) Medium of exchange, unit of account, and store of value.