Cuba is a command economy that suffered a decline in economic growth because of a cut in the aid provided by the former Soviet Union when the latter collapsed. As a consequence, Cuba:
A. Experienced an outward shift of its production possibilities curve
B. Experienced an inward shift of its production possibilities curve
C. Moved from one point to another along its existing production possibilities curve
D. Went to a point inside its production possibilities curve
Answer: B
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A shock that could trigger a recession is a
a. large increase in oil prices b. stock market bubble c. sudden increase in military spending d. large decrease in oil prices e. sudden decrease in the interest rate
If price is below average variable costs at all rates of output, the quantity supplied by a perfectly competitive firm will equal
A. the rate of output where marginal revenue equals average fixed costs. B. the rate of output associated with the break-even point. C. zero. D. the rate of output where price equals marginal cost.
Which of these is a subjective evaluation method used for assessing an employee's compensation?
A. Across-firm performance benchmarking B. Ratcheting up of standards C. Output-based system D. Goal-based system
Use the following graph to answer the next question.
When output increases from Q1 and the price level decreases from P1, this change will ________.
A. be caused by a shift in the aggregate supply curve from AS1 to AS2 B. result in a movement along the aggregate demand curve from e3 to e1 C. result in a movement along the aggregate demand curve from e1 to e2 D. be caused by a shift in the aggregate supply curve from AS1 to AS3