Assume an economy is operating on its production possibilities curve, which shows the production of military and civilian goods. If the output of military goods is increased, the output of civilian goods:
A) will increase too.
B) will not change.
C) must decrease.
D) may increase or decrease.
Ans: C) must decrease.
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In general, activists are ________ about the ability of the economy to remain stable and non-activists are ________
A) pessimistic; optimistic B) optimistic; optimistic C) pessimistic; pessimistic D) optimistic; pessimistic
Gordon believes that the expansion which began in 1982 did so because of the
A) expansionary monetary policy which was pursued. B) Reagan tax cuts, the passage of the Economic Recovery Act in 1981. C) increases in consumer and business firm optimism concerning future business conditions. D) A and B are both correct.
As the price level decreases, other things being equal, a. aggregate demand increases
b. the quantity of real gross domestic product demanded increases. c. the quantity of real gross domestic product demanded decreases. d. real gross domestic product supplied increases.
When a binding price floor is imposed on a market to benefit sellers,
a. no sellers actually benefit. b. some sellers benefit, but no sellers are harmed. c. some sellers benefit, and some sellers are harmed. d. all sellers benefit.