In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is inefficient?
A) 4 million pounds of bananas and 4 million hats
B) 2 million pounds of bananas and 5 million hats
C) 0 pounds of bananas and 6 million hats
D) 1 million pounds of bananas and 3 million hats
D
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The larger the number of firms in an industry
A) the more intense the rivalry among firms. B) the larger the potential number of market segments. C) the easier it is to implicitly collude to fix prices. D) the greater the need for a price enforcement mechanism.
Which of the following would cause the production function to shift upward?
a. A decrease in the capital stock b. A decrease in human capital c. An increase in population d. An increase in human capital e. Diminishing returns to labor
If a country has a balance of payments deficit and wishes to maintain the fixed value of its currency, it will generally
a. sell its own currency for foreign currencies. b. buy its own currency with foreign reserves. c. decrease taxes to increase domestic disposable income. d. increase the money supply to keep interest rates down.
According to classical macroeconomic theory, changes in the money supply change nominal but not real variables
a. True b. False Indicate whether the statement is true or false