The figure above shows the production possibilities frontier for a country. A combination of 4 million gallons of milk and 4 million gallons of ice cream is
A) unattainable and production efficient.
B) attainable and production efficient.
C) unattainable.
D) attainable and production inefficient.
E) More information is needed to determine if the point is attainable or not.
C
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
The reversal of fortune is strong evidence against the:
A) religious hypothesis of economic prosperity. B) geography hypothesis of economic prosperity. C) culture hypothesis of economic prosperity. D) institutions hypothesis of economic prosperity.
When there is market failure so that a market produces less than the efficient amount,
A) consumer surplus definitely is larger than when the efficient quantity is produced. B) the sum of producer surplus and consumer surplus is larger than when the efficient quantity is produced. C) there is a deadweight loss. D) consumers definitely lose and producers definitely gain. E) consumers definitely gain and producers definitely lose.
What conditions might be required for an import-substitution policy to be effective? What advantages might it bring?
What will be an ideal response?