Refer to the above figure. How do you describe what is happening as the economy moves from point C to point B?
A. The economy has increased its wool production by 30 bales at an opportunity cost of 250 loaves of bread.
B. Previously unemployed resources are now being devoted to the production of wool.
C. Previously unemployed resources are now being devoted to the production of bread.
D. The economy has acquired new resources for making bread.
Answer: B
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In periods of high inflation,
a. people want to hold on to as much money as possible. b. the purchasing power of money is decreasing. c. nobody wants to work and earn income. d. low nominal interest rates are likely to result. e. nobody wants to buy goods and services.
Explain why economists abandoned the Humphrey-Hawkins Act of 1978 as target policy
Banks try to keep their excess reserves at a maximum in order to maximize profits
a. True b. False Indicate whether the statement is true or false
A major criticism of static tax analysis is that it
A) uses only ad valorem taxes. B) does not use ad valorem taxes. C) ignores the incentive effects created by higher tax rates. D) assumes that the tax base will not increase.