Which statement is true?
A. On the production possibilities frontier there is zero unemployment.
B. On the production possibilities frontier 95 percent of the labor force is employed.
C. To get out of a recession, we must produce at some point beyond our production possibilities frontier.
D. To have economic growth, we must push the production possibilities frontier inward.
B. On the production possibilities frontier 95 percent of the labor force is employed.
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GDP is a measure of the total output of an economy.
Answer the following statement true (T) or false (F)
If there are no changes in inflation expectations, a sale of government bonds by the Fed in the open market will cause ________
A) both the federal funds rate and long-run expected real interest rate to rise B) both the federal funds rate and long-run expected real interest rate to fall C) the federal funds rate to fall and the long-run expected real interest rate to rise D) the federal funds rate to rise and the long-run expected real interest rate to fall
Which of the following helps in preventing firms in the U.S. from forming collusive agreements?
A) The low demand faced by colluding firms B) The antitrust policy of the government C) The high rate of corporate income taxes D) The low profit earned by firms after colluding
Three airlines account for most of the air traffic in and out of a local city. If the three airlines joined together in setting fares and air travel schedules, economists would say that they were acting as: a. monopolistic competitors, as each firm would have to differentiate its airline services from its rivals
b. perfect competitors, as each firm would sell travel services at the same fares as the other airlines. c. a cartel, as the three airlines together would attempt to coordinate policies in the local market to jointly maximize profits. d. none of the above