A production possibilities curve depicts
a. combinations of resources the economy has the capacity to produce
b. prices that can be charged for capital and consumption goods
c. combinations of prices and outputs that can be produced
d. combinations of goods the economy has the capacity to produce
e. combinations of resources and prices that the economy can produce
D
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Which of the following holds true, if goods sell for the same price worldwide when converted to a common currency?
a. A high rate of inflation exists. b. A fixed exchange-rate system exists. c. Purchasing power parity exists. d. The foreign exchange market is in equilibrium. e. Arbitrage opportunities exist.
Which of the following is an example of an unintended consequence?
a. first time tax credits that cause more home sales b. a price ceiling on gasoline that causes a gas shortage and leads some gas stations to go out of business. c. increased parking fines that lead to fewer violators d. all of the above
If Bank A borrows from Bank B, reserves in the banking system __________. If Bank A borrows from the Fed, reserves in the banking system __________
A) rise; fall B) fall; remain unchanged C) remain unchanged; remain unchanged D) remain unchanged; rise E) rise; remain unchanged
Which of the following is the accurate equation for velocity?
a. V = (M x Q)/ P b. V = P x Q x M c. V = (P x Q)/M d. V = P + Q รท M