If a production possibilities frontier (PPF) is concave outward, it follows that
What will be an ideal response?
the opportunity cost (of producing the good on the horizontal axis) rises as more of the good is produced.
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Free trade
A) helps economic growth by increasing tariffs. B) hurts economic growth because foreigners are not bound by the same patent laws as we are. C) helps economic growth by encouraging the sharing of technology and industrial ideas. D) hurts economic growth because foreign countries can produce goods with lower labor costs.
The long-run aggregate supply curve of an economy corresponds to
A) a point inside the production possibilities curve. B) a point outside the production possibilities curve. C) a point on the production possibilities curve. D) none of the above: there is no relationship between the long-run aggregate supply curve and the production possibilities curve.
The recessionary gap is the
A. amount of unemployment compensation required during a recession. B. budget deficit encountered during a recession. C. amount of government spending needed to end a recession. D. distance between the equilibrium level of output and the full employment level of output.
The ________ shows the relationship between the price level and quantity of real GDP demanded
A) consumer price index B) aggregate expenditure line C) 45-degree line D) aggregate demand curve