The typical result of an adverse supply shock is
A. falling output accompanied by accelerating inflation.
B. falling output accompanied by decelerating inflation.
C. rising output accompanied by accelerating inflation.
D. rising output accompanied by decelerating inflation.
Answer: A
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Suppose India and France have the same PPF, shown in the figure above. Based on their current production points, India's most likely future PPF is ________ and France's most likely future PPF is ________
A) PPF1; PPF1 B) PPF2; PPF2 C) PPF0; PPF0 D) PPF2; PPF1 E) PPF1; PPF2
Suppose the U.S. dollar gains strength against the euro (and against other major currencies). This strengthening of the dollar will cause which of the following to occur?
A) The aggregate demand curve will shift to the right and the short-run aggregate supply will shift to the right. B) The aggregate demand curve will shift to the left and the short-run aggregate supply will shift to the right. C) The aggregate demand curve will shift to the right and the short-run aggregate supply will shift to the left. D) the aggregate demand curve will shift to the left and the short-run aggregate supply will shift to the left.
Figure 34-7
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In Figure 34-7, where AB represents the production possibilities of Pestoland and CD the production possibilities of Pastaland, Pastaland is
A. better at producing pasta and pesto than Pestoland. B. better at producing pasta, but relatively inefficient in producing pesto. C. relatively better at producing pasta than pesto. D. relatively better at producing pesto than pasta.
Isoquants are the ______ created by the ______.
A. contour lines; production function B. contour lines; efficient production frontier C. tangent lines; production function D. tangent lines; production possibilities curve