Consider the production possibilities frontier displayed in the figure shown. Which of the following combinations could be produced?
A. (10 watermelons, 400 bushels of apples)
B. (15 watermelons, 100 bushels of apples)
C. (20 watermelons, 400 bushels of apples)
D. (10 watermelons, 300 bushels of apples)
Answer: B
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An increase in the relative price of a good cannot be caused by
A) an increase in the nominal price of the good that is greater than the increase in the nominal price of the other good. B) a decrease in the nominal price of the good that is less than the decrease in the nominal price of the other good. C) a decrease in the nominal price of the other good while the price of the good itself remains constant. D) an increase in the nominal price of the other good while the price of the good itself remains constant.
In a short-run Keynesian model where the marginal propensity to consume is 0.5, to offset a recessionary gap resulting from a $1 billion decrease in autonomous consumption, government purchases must be:
A. increased by $1 billion. B. increased by $0.5 billion. C. decreased by $1 billion. D. increased by $2 billion.
When the controls of an organization are centralized, the communication between departments will be
a. vertical b. horizontal c. directional d. hub and spoke
The application of Keynesian economics to public finance and fiscal policy by Abba Lerner, and its incorporation into Paul Samuelson's economic principles textbook, was known as procyclical finance.
Answer the following statement true (T) or false (F)