Refer to the above figure. How do you describe what is happening as the economy moves from point C to point B?
A) Previously unemployed resources are now being devoted to the production of wool.
B) Previously unemployed resources are now being devoted to the production of bread.
C) The economy has increased its wool production by 30 bales at an opportunity cost of 250 loaves of bread.
D) The economy has acquired new resources for making bread.
A
You might also like to view...
Consider an economy where the growth rate of real GDP is 6% and the growth rate of money supply is 8%. If the quantity theory of money holds, the inflation rate in the economy will be:
A) 8%. B) 6%. C) 2%. D) 14%.
In the foreign exchange market, the
A) supply of dollars decreases as the exchange rate increases and the quantity of dollars supplied does not change. B) quantity of dollars supplied increases as the exchange rate decreases and the supply of dollars does not change. C) quantity of dollars supplied increases as the exchange rate increases and the supply of dollars does not change. D) supply of dollars increases as the exchange rate increases and the quantity of dollars supplied does not change. E) both the quantity of dollars supplied and the supply of dollars increases as the exchange rate increases.
Assume that your nominal wage was fixed at $15 an hour, and the price of a gallon of gasoline rose from $1.00 to $1.05. In this case, your real wage (in terms of gasoline) has
A. increased to $20. B. decreased to $14.25. C. decreased to $10. D. increased to $15.75.
Which of the following is a positive statement?
A. When tax revenues are less than government spending there is a budget deficit. B. Inflation is the most damaging thing that can occur in an economy. C. We need to carefully protect our borders. D. Foreign aid should be reduced to help reduce the national debt.