As you move up the production possibility frontier, the absolute value of the marginal rate of transformation
A. initially decreases, then increases.
B. increases.
C. decreases.
D. initially increases, then decreases.
Answer: B
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When the monetary base increases by $2 billion, the quantity of money increases by $10 billion. Thus, the money multiplier equals
A) 0.2. B) 5. C) 20.0. D) 0.5.
One factor hastening the demise of the Soviet Union was _____
a. its military alliance with Cuba b. its attempt to keep up with the United States in an arms race c. its inability to predict the optimal amount of defense spending d. its strong economic output
Assume that foreign capital flows from a nation increase due to political uncertainly and increased risk. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the GDP Price Index and current international transactions balance in the context of the Three-Sector-Model? a. The GDP Price Index falls and current international transactions
balance becomes more positive (or less negative). b. The GDP Price Index rises and current international transactions balance becomes more negative (or less positive). c. The GDP Price Index and current international transactions balance remain the same. d. The GDP Price Index rises and current international transactions balance remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Hard money:
A. includes cash. B. is the least narrow definition of money. C. is not very liquid. D. cannot always be used in transactions immediately, but is accessible.