Use the following production possibilities frontier to answer the next question.
Which point or output-combination in the above graph could the nation produce only if it experienced economic growth?
A. combination E
B. combination C
C. combination F
D. combination G
Answer: D
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The concept of opportunity cost in a fully employed economy with technology and resources held constant tells us that
A. expansion of output in one industry means expansion cannot occur in another industry. B. expansion of output in one industry means output in another industry must contract. C. output cannot be increased in any industry. D. output of all industries must contract until more resources are found.
Which of the following is not correct?
a. Indifference curves are downward sloping. b. Indifference curves that are closer to the origin are preferred to indifference curves that are further from the origin. c. Indifference curves are bowed in toward the origin. d. Indifference curves do not cross.
Explain how a change in the money supply can affect the following in the short run: a. The supply of loanable funds b. Real GDP c. The price level d. The expected inflation rate
Which part of the following equation represents open economy effects?
AE ? C + I + G + (X – M) a. C b. I c. G d. (X – M)