Assuming that a society always operates on its production possibilities curve, an inward shift of the curve implies that
A. the country's capacity to produce is fixed.
B. the country is not using its resources efficiently.
C. the country's capacity to produce has contracted.
D. All of the choices are true.
C. the country's capacity to produce has contracted.
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Financial intermediaries, such as commercial banks, help borrowers, particularly small borrowers, by:
A. offering tax-preferred borrowing opportunities. B. eliminating the risk of borrowing. C. providing information to evaluate financial investments. D. providing credit that might otherwise not be available.
The time it takes for policymakers to obtain and to understand the data and to change the policy instrument based on that information is known as ________, respectively
A) the data, recognition, and effectiveness lags B) the recognition, data, and effectiveness lags C) the data, recognition, and implementation lags D) the recognition, implementation, and effectiveness lags E) the data, implementation, and effectiveness lags
Suppose that an MBA degree creates no externality because the benefits of an MBA are internalized by the student in the form of higher wages. If the government offers subsidies for MBAs, then which of the following statements is correct?
a. The equilibrium quantity of MBAs will equal the socially optimal quantity of MBAs. b. The equilibrium quantity of MBAs will be greater than the socially optimal quantity of MBAs. c. The equilibrium quantity of MBAs will be less than the socially optimal quantity of MBAs. d. There is not enough information to answer the question.