Which of the following is likely to cause an outward shift of a production possibility curve?
a. An increase in the price of the commodity represented on the horizontal axis
b. A fall in the cost of producing the commodity represented on the vertical axis
c. An improvement in the available technology
d. A fall in the supply of resources
e. An increase in the supply of unskilled workers
c
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In the classical model, a rightward shift in the aggregate demand curve will, in the long run,
A) increase real GDP and the price level. B) increase real GDP and will not change the price level. C) decrease real GDP and will not change the price level. D) not change real GDP and will increase the price level.
The law of demand is graphically depicted as a(n)
a. vertical demand curve b. horizontal demand curve c. downward-sloping demand curve d. upward-sloping demand curve e. curved demand line
When an expansionary fiscal policy increases market interest rates and lowers gross private investment in an economy, it is called the: a. countercyclical effect. b. policy lag effect
c. multiplier effect. d. crowding out effect.
When supply increases and at the same time demand decreases, we
A. can predict that both equilibrium price and quantity will decrease. B. cannot predict equilibrium quantity, but know that equilibrium price will decrease. C. can predict that both equilibrium price and quantity will increase. D. cannot predict the change in either the equilibrium quantity or equilibrium price.