When society produces the combination of goods and services on the PPF that it values the most highly, society has
A) achieved only production efficiency and definitely not allocative efficiency.
B) achieved only allocative efficiency definitely not production efficiency.
C) achieved both production efficiency and allocative efficiency.
D) achieved a free lunch.
E) perhaps achieved production efficiency and has perhaps achieved allocative efficiency.
C
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Use the following table showing the consumption schedule for a hypothetical economy to answer the next question.All figures are in billions of dollars.RGDPConsumption$600$590610598620606630614640622650630660638If gross investments were fixed at $16, taxes were zero, government purchases of goods and services were zero, and net exports were zero, then equilibrium real GDP would be $630 initially. If government purchases were then raised from $0 to $4, other things constant, then the equilibrium real GDP would become
A. $630. B. $660. C. $640. D. $650.
Everything else held constant, if a central bank makes a sterilized purchase of foreign assets, then the domestic currency will
A) appreciate. B) depreciate. C) either appreciate, depreciate, or remain constant. D) not be affected.
Refer to the above figure. Assume that B is the current long-run aggregate supply (LRAS) curve and E is the current short-run aggregate supply (SRAS) curve
If a 90-day embargo of oil from the Middle East to the United States were announced, and if after that 90-day period oil prices were expected to return to normal pre-embargo prices, then you would expect A) the LRAS and the SRAS to remain at B and E, respectively. B) the LRAS to remain at B, but the SRAS to shift to D. C) the LRAS to remain at B, but the SRAS to shift to F. D) the LRAS to shift to C, and the SRAS to shift to F.
The quantity of funds demanded by borrowers:
a. is directly related to the rate of interest b. is inversely related to the rate of interest. c. is unrelated to the rate of interest. d. first increases and then decreases with the rate of interest.