Every point on the joint production possibilities frontier represents
A) an initial endowment.
B) inefficient production.
C) the marginal rate of substitution of goods for each producer.
D) at least one producer specializing in production.
D
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Consider a large open economy that has a zero current account balance
What are the effects on the world real interest rate, national saving, investment, and the current account balance in equilibrium if (a) future income rises? (b) business taxes decline? (c) government purchases decline? (d) the future marginal product of capital declines?
The statement, “Supply creates its own demand,” is also known as
a. Keynes’ law. b. neoclassical economics. c. Say’s law. d. Adam Smith’s law.
If the FOMC orders the sale of T-bills in the open market, then bank reserves are
a. decreased, but the money supply will remain unchanged. b. decreased, and a multiple contraction of the money supply will occur. c. increased, but the money supply will remain unchanged. d. increased, and a multiple expansion of the money supply will occur.
If expected future prices rise, this causes the nation's current:
a. Aggregate demand to fall, the average price level to fall, and real GDP to rise. b. Aggregate supply to rise, the average price level to rise, and real GDP to rise. c. Aggregate demand to rise, the average price level to rise, and real GDP to rise. d. Aggregate supply to fall, the average price level to rise, and real GDP to fall. e. Aggregate demand to fall, the average price level to fall, and real GDP to fall.