When a nation is producing on its production possibilities frontier, if more resources are used to produce one good, then the production of other goods
A) must increase.
B) must decrease.
C) must remain the same.
D) must change but they might increase or decrease.
E) might increase if the nation can produce more efficiently.
B
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If foreign holdings of U.S. dollars decrease, holding all else constant,
A) the balance on the U.S. current account will decrease. B) the U.S. balance of trade will decrease. C) the balance on the U.S. financial account will decrease. D) the balance on the U.S. capital account will decrease.
As the Asian financial crisis of 1997 began to spread, it became obvious to investors that Korean investments would provide lower returns than expected. What was the impact of such a realization on the foreign exchange market?
a. The supply of Korean won decreased as people tried to withdraw their Korean investments. b. The price of dollar in terms of Korean currency decreased as people invested more in U.S. assets. c. The demand for dollars decreased as investors realized that there is a worldwide crisis going on. d. The demand for dollars increased as investors put their money in U.S. and other foreign assets. e. The demand for Korean won increased as investors decided to invest in Korean assets.
When one currency appreciates, another currency must depreciate
a. True b. False Indicate whether the statement is true or false
Refer to the graph shown. If this firm is maximizing profit, it will:
A. earn just normal profits, that is, zero economic profits. B. earn economic profits. C. make enough to cover its variable costs but not its fixed costs. D. incur a loss.