If a society is producing at a point along its production possibility frontier, then the society
A. is underallocating resources so it must be inefficient.
B. is fully employing its resources so it must be achieving output efficiency.
C. is fully employing its resources, but not necessarily achieving output efficiency.
D. is overallocating resources so efficiency is indeterminate.
Answer: C
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Pollution is an example of a negative externality.
Answer the following statement true (T) or false (F)
If the long-term labor force growth rate is 1.2% and the long-term productivity growth rate is 2.4%, then the
A. spending multiplier is 2. B. potential growth rate is 3.6%. C. real GDP per capita growth rate is 0.5%. D. short-term growth rate is 1.2%.
A cooperative game is
A) companies colluding in order to make higher than competitive rates of return. B) the manner in which one oligopolist reacts to a change in price made by another oligopolist in the industry. C) a game in which firms will not negotiate in any way. D) when plans made by firms are known as game strategies.
Which of the following is not a method to reduce the inflationary gap?
A. Increasing government spending B. Reducing transfer payments C. Raising taxes D. Decreasing government expenditure