Refer to Figure 2-10. If the economy moves from point C to point B, then which of the following statements is correct?
a. The economy benefited from a technological advance in the production of baseballs.
b. The opportunity cost of each additional baseball is 2 bananas.
c. The opportunity cost of each additional banana is 2 baseballs.
d. The move involves no opportunity cost; it simply reflects the desires of the economy's citizens.
d. The move involves no opportunity cost; it simply reflects the desires of the economy's citizens.
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Holding other factors constant, technological progress ________ the real wage and ________ employment.
A. decreases; increases B. increases; decreases C. increases; does not change D. increases; increases
If saving is less than investment, the appropriate countercyclical monetary policy would be:
A. an open market sale of government bonds. B. a cut in the reserve requirement. C. a cut in the federal funds rate. D. a cut in the discount rate.
Suppose our economy is in macroeconomic equilibrium with an upward-sloping aggregate supply curve and a downward-sloping aggregate demand curve. An increase in aggregate demand will
A. increase aggregate supply. B. decrease the price level. C. cause the aggregate supply curve to shift to the right. D. increase real GDP.
Noncontrollable expenditures are called "noncontrollable" because
A. they change without congressional action. B. only the president can approve these entitlement payments. C. the political process determines the size of the payments. D. they increase at the same rate as the public debt.