Exhibit 2-13 Production possibilities curve
In Exhibit 2-13, point H is:
A. achievable with today's resource base.
B. not achievable today because the economy has not achieved full employment.
C. not achievable today because the economy is not at its maximum point of efficiency.
D. not achievable today because of inadequate production capacity.
Answer: D
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In the monetary small open-economy model with a fixed exchange rate, an increase in the foreign price level has which impact on domestic money demand?
A) It increases it. B) It decreases it. C) It has no impact. D) It depends.
If the price elasticity of demand for a good is 0.4, then which of the following events is consistent with a 2 percent decrease in the quantity of the good demanded?
a. a 0.8 percent increase in the price of the good b. a 2.4 percent increase in the price of the good c. a 5 percent increase in the price of the good d. a 8 percent increase in the price of the good
Which of the following will be reduced during an expansionary monetary policy?
a. the return to saving b. spending c. borrowing d. money supply
The expected rate of inflation is built into current nominal rates of interest.
a. true b. false