What does a production possibilities curve show?
a. the amount of goods and services that all groups together want to purchase in a given period
b. the difference between the actual distribution of income and perfect equality
c. the inverse relationship between production and quantity demanded
d. the potential total output combinations of any two goods for an economy in a given period
d. the potential total output combinations of any two goods for an economy in a given period
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When the Fed purchases government securities ________ loans end up being made because ________
A) more; excess reserves in the banking system increase B) fewer; excess reserves in the banking system decrease C) more; excess reserves in the banking system decrease D) fewer; required reserves in the banking system increase but desired reserves decrease E) fewer; excess reserves in the banking system increase
When someone sells a bond at a discount, the holder of the bond earns ________ with the purchase
A) a capital gain B) a capital loss C) market value D) interest
Which of the following is not a phase of the business cycle?
a. peak. b. trough. c. compression. d. expansion.
If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output. B. lower price level and lower level of output. C. higher price level and higher level of output. D. lower price level and higher level of output.