Explain why a movement from a point inside a production possibilities frontier to the production possibilities frontier is described as a free lunch and a movement along a production possibilities frontier is described as a tradeoff
What will be an ideal response?
The key point to answer this question is the fact that producing more of a good requires more resources. Hence, if all resources are employed efficiently, as is the case when producing on the production possibilities frontier, producing more of one good means reallocating resources away from the production of another good; there is a tradeoff between the two goods. In other words, to produce more of one good, the production of another must be given u
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How is poverty measured? What is the extent of poverty in the developing world?
What will be an ideal response?
The number of transactions a typical dollar is used in during a given period is called the:
A. velocity of money. B. transaction rate. C. quantity theory of money. D. transaction velocity.
The relationship between the price level and the quantity of real GDP supplied is
a. full employment output. b. inflationary or recessionary gap. c. aggregate supply. d. supply-side equilibrium.
Foreign savings that are used for investment spending in the United States are ______.
a. domestic savings b. unilateral transfers c. service imports d. capital inflows