In Figure 1.6, if the opportunity cost of producing cars was zero at all levels of production, the production possibilities curve would be best be represented by a
A. Horizontal line.
B. 45-degree line starting at the origin.
C. Vertical line.
D. Circle.
Answer: C
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
During the financial crisis of 2007–2009, why did the Federal Reserve begin to utilize various types of unconventional monetary policy?
A. The federal funds rate had already been increased as much as possible. B. The discount rate had already been increased as much as possible. C. The federal funds rate had already been reduced to zero. D. The discount rate had already been reduced to zero.
Most Americans believe that anyone who is poor can get rich by working hard
Indicate whether the statement is true or false
Which of the following would be counted as a final good for GDP?
a. a used truck b. lumber for construction c. steel for manufacturing d. a new house