As you move down the production possibility frontier, the absolute value of the marginal rate of transformation
A. increases.
B. initially decreases, then increases.
C. decreases.
D. initially increases, then decreases.
Answer: A
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The aggregate supply curve is defined as:
a. net national product. b. the sum of wages, rent, interest, and profits. c. the real GDP produced at different price levels. d. the total dollar value of household expenditures.
The incentive to work is an ingredient of the negative income tax because
a. if families do work, they will be eliminated from the program b. if families don't work, they will be eliminated from the program c. the more income earned in the workplace, the higher the family's after-tax income d. the more income earned in the workplace, the higher the payment from the government e. the amount earned in the workplace is not subject to income taxes
Differentiate between an induced increase in consumption and an autonomous increase in consumption. How are they represented on a graph?
Suppose that Congress were to repeal an investment tax credit. What would happen in the market for loanable funds?
a. The demand and supply of loanable funds would shift right. b. The demand and supply of loanable funds would shift left. c. The supply of loanable funds would shift right. d. The demand for loanable funds would shift left.