In general economic environments that correspond to lower levels of planned aggregate expenditure for a given level of Y have PAE curves that are:
A. lower on the expenditure diagram.
B. higher on the expenditure diagram.
C. equivalent at point in the diagram.
D. at multiple points on the diagram.
Answer: A
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A reduction in national savings will
a. increase foreign capital flows into the country. b. reduce domestic investment. c. reduce domestic interest rates. d. both a and b. e. none of the above.
If a country wanted to maximize the value of its output, each job should be carried out by the person who: a. has the highest opportunity cost
b. has a comparative advantage in that activity. c. can complete the particular job most rapidly. d. enjoys that job the least.
Scarce good
What will be an ideal response?
A convenience store pays a farmer $1.25 per pineapple. If it costs the farmer $0.15 in seeds, $0.25 in fertilizer, and $0.25 in forgone output to grow each pineapple, the value added by the farmer to each pineapple is
A. $0.40. B. $1.25. C. $0.60. D. $0.85.