A reduction in the level of unemployment would have which effect with respect to the nation's production possibilities curve?
A. It would shift the curve to the right
B. It would shift the curve to the left
C. It would not shift the curve; it would be represented by a movement from a point inside the curve toward a point on the curve
D. It would not shift the curve; it would be represented by a movement from a point on the curve to a point outside the curve
Answer: C
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Answer the following statement true (T) or false (F)
How many members are there on the Board of Governors of the Federal Reserve?
a. 12 b. 50 c. 7 d. 4 e. 14
Concern about an international crisis has caused consumers to save their money and postpone big purchases. What is the effect on aggregate demand and aggregate supply?
(A) Both aggregate demand and aggregate supply will decrease, leading to lower real GDP. (B) Aggregate demand will decrease, lowering both real GDP and the price level. (C) Aggregate supply will decrease, raising the price level and lowering real GDP. (D) No change on aggregate demand and aggregate supply.
In the long run, a perfectly competitive market produces at ________, whereas the monopolistic competitive firm does not
A) the output at which the lowest average total cost of production is reached B) an output level at which positive economic profits exist C) zero economic profits D) the point at which MR = MC=ATC