In the above figure, the economy is initially at point B. If the government decreases transfer payments, there is
A) a movement to point C.
B) a movement to point A.
C) a shift to AD2.
D) a shift to AD1.
C
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The above table shows production combinations on a country's production possibilities frontier. What is the opportunity cost of increasing the production of X from 0 to 3 units?
A) 40 units of good Y per unit of good X B) 3 units of good Y per unit of good X C) 4/3 units of good Y per unit of good X D) 0 units of good Y per unit of good X
Which of the following policy actions could speed productivity growth?
I. Tax incentives to encourage saving II. Encouraging international trade III. Directing public funds toward financing basic research A) II only B) I and III C) I only D) I, II, and III
Give three examples of ways in which financial markets channel household savings into investment projects
What will be an ideal response?
An economic model should capture
A) the essential relationships that help to analyze the problem. B) all possible variables that apply to the problem. C) only social value related variables. D) all of the above.