In a certain country, it takes five of its 10workers to produce one barrel of wine butonly one worker to produce 1 yard ofcloth. If we graphed this country's PPF(placing wine on the vertical axis andcloth on the horizontal axis), the slope ofthe PPF would equal –1/5.
Answer the following statement(s) true (T) or false (F)
Answer: True
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
If households have information that monetary policy is likely to change in the future, that information will play a role in forming ________
A) adaptive expectations B) rational expectations C) tertiary expectations D) non-adaptive expectations
How much deadweight loss a tax causes is primarily determined by:
A. how responsive buyers and sellers are to a price change. B. how much tax revenue the government generates. C. whether the tax is imposed on the buyer or seller. D. the ability of the government to impose the tax.
Which of the following is not consistent with a goal of reducing the power of firms in the market?
a. shortening patent life b. creative destruction theory c. countervailing power theory d. Schumpeter's economies of scale argument e. antitrust policy