Some resources are better suited to produce certain goods than other resources. This fact leads to
A) a linear production possibilities curve.
B) inefficiency in the economy.
C) the law of increasing additional cost.
D) increases in technology.
C
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The best explanation of why the aggregate demand curve has a negative slope is that
A) at a higher price level households cut back on their spending on goods and services. B) at a higher price level business firms wish to produce more goods and services. C) a higher price level results in lower real balances and a higher real interest rate. D) a higher price level results in less government spending on transfers, such as unemployment insurance and social security payments.
Which feature of the business cycle does the one-period model replicate with shocks to government expenditures?
A) procyclical employment B) procyclical consumption C) procyclical real wages D) countercyclical prices
What is one of the biggest benefits of trade that is hard to measure?
a. the transfer of goods from rich countries to poor countries b. the transfer of knowledge from poor countries to rich countries c. the transfer of knowledge from rich countries to poor countries d. the transfer of goods from poor countries to rich countries
Suppose a country has 1 billion people. 75 percent of its citizens are in the labor force, with 90 million unemployed. Full employment occurs at 2 percent. Based on this information, by what percentage has real output failed to reach its potential according to the revised Okun's Law?
A. 12 percent. B. 2 percent. C. 24 percent. D. 10 percent.