What is TRUE about every point along a production possibilities frontier?
A) Both people are maximizing utility.
B) It is impossible to increase production of either good.
C) All allocations are efficient.
D) It includes some unattainable points.
C
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The most volatile component of aggregate demand is
A. consumer spending. B. government purchases. C. net exports. D. investment spending.
If the Fed wants to increase bank reserves, it can:
A. Buy bonds. B. Raise the discount rate. C. Raise the reserve requirement. D. Sell bonds.
The negative relationship between the quantity demanded of a commodity and its price can be explained by the principle of
A. increasing total utility. B. contingent valuation. C. diminishing marginal utility. D. indifference analysis.
Which of the following statements is true?
A) Only government policymakers can improve decision making by using economic principles. B) Only government policymakers and business managers can improve decision making by using economic principles. C) Only business managers and individuals can improve decision making by using economic principles. D) Government policymakers, business managers, and individuals can all improve decision making by using economic principles.