Refer to the information provided in Figure 28.7 below to answer the question(s) that follow.
Figure 28.7Refer to Figure 28.7. Suppose the economy is initially at Point A. A contractionary fiscal policy moves the economy to Point ________ in the short run.
A. E
B. B
C. C
D. D
Answer: B
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Saving is disposable personal income not spent on consumption
a. True b. False Indicate whether the statement is true or false
Gross Domestic Product is a monetary measure of
a. total consumption in the economy. b. the total value of all final goods and services. c. total industrial output. d. the total value of all foreign sales and purchases.
Answer the next question based on the data provided in the tables below for two hypothetical nations, Wat and Xat. The nations have the following production possibilities for rice and corn:Wat's Production Possibilities ABCDEFRice7506004503001500Corn050100150200250Xat's Production Possibilities ABCDEFRice2,5002,0001,5001,0005000Corn0100200300400500Assume that Wat originally produced rice and corn at combination C and that Xat originally produced combination B. If the nations now fully specialized based on comparative advantage, the total gains from specialization and trade are
A. 50 units of rice and 50 units of corn. B. 100 units of rice and 150 units of corn. C. 100 units of rice and 100 units of corn. D. 25 units of rice and 25 units of corn.
Which assumption(s) is (are) necessary for an efficient allocation of resources among firms?
A. Firms behave so as to maximize their profits. B. Factor markets are open and competitive. C. All firms pay the same prices for inputs. D. All of the above are correct.