On a graph of a production possibilities curve, if a point is attainable, then it:
A. must be efficient.
B. must completely exhaust all currently available resources.
C. might or might not be efficient.
D. is efficient only if it does not exhaust all currently available resources.
Answer: C
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Refer to the table below. Based on their comparative advantage, Martha should specialize in ________ while Julia should specialize in ________. Time to Make a PieTime to Make a CakeMartha60 minutes80 minutesJulia50 minutes60 minutes
A. cakes; pies B. neither pies nor cakes; both pies and cakes C. pies; cakes D. both pies and cakes; neither pies nor cakes
Refer to the figure above. Which of the following statements is true when the credit demand curve is CD1 and the credit supply curve is CS1?
A) At all rates of interest above 3% there will be a tendency for real interest rates to fall. B) At all rates of interest above 4% there will be a tendency for real interest rates to fall. C) At all rates of interest above 2% there will be a tendency for real interest rates to fall. D) At all rates of interest above 1% there will be a tendency for real interest rates to fall.
If the MPC = 0.8, and planned autonomous investment increases by $80 billion, then equilibrium real GDP will increase by
A) $320 billion. B) $80 billion. C) $400 billion. D) $64 billion.
In the market for reserves, a lower interest rate paid on excess reserves
A) decreases the supply of reserves. B) increases the supply of reserves. C) decreases the effective floor for the federal funds rate. D) increases the effective floor for the federal funds rate.