The political party that is in power determines the position and shape of the production possibilities frontier that constrains the choices of the economy
a. True
b. False
Indicate whether the statement is true or false
False
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Refer to Figure 10.1. If only one light is installed, the person who is responsible for the light being installed receives a payoff of
A) 2. B) 4. C) 6. D) 8.
Which of the following is most likely to have increasing opportunity costs?
A) a riding lawnmower B) an office building in Tokyo C) a large copy machine D) a pizza oven
Once either expansionary or contractionary fiscal policy has been undertaken,
A) aggregate demand will respond quickly and the problems in the economy will be corrected. B) aggregate demand will respond quickly in the short run but the economy will not improve in the long-run. C) a time lag exists between implementation and the results of the policy. D) taxes will need to be adjusted because of the recognition time lag.
A simultaneous $10 million increase in both taxes and government spending will have no net effect on aggregate demand
a. True b. False Indicate whether the statement is true or false