The nation's production possibilities frontier is bowed outward. Suppose that the government decides to increase the production of armaments by $20 billion, and that as a result the output of consumer goods falls by $20 billion
If a further $20 billion increase beyond the initial $20 billion increase in armaments output is sought, we can expect that the output of consumer goods and services will fall further by A) less than $20 billion.
B) $20 billion.
C) more than $20 billion.
D) There is not enough information to determine the answer.
C
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Which of the following is an example of an automatic fiscal policy action?
A) increased unemployment payments resulting from higher unemployment B) an increase in spending on defense goods resulting from increased world tensions C) an increase in the tax rate resulting from a desire to shrink the budget deficit D) a decrease in the tax rate resulting from an effort to increase aggregate demand to combat a recession E) None of the above answers is correct.
Annie had a job as a human resource manager of a restaurant chain that went out of business due to a downturn in the economy. This is an example of
A) cyclical unemployment. B) structural unemployment. C) seasonal unemployment. D) technological unemployment.
One of the economic changes that has most dramatically reshaped the world is:
A. the rapid growth of China's economy. B. the rapid decline of Haiti's economy. C. the unemployment rate declining in the U.S. by 40 percent. D. the rapid growth of Italy's economy.
Suppose you use the rate of inflation as the interest rate for determining the present value of $1. What would the present value of $3,000 received in three equal yearly payments be if the current rate of inflation is 3.5% and increases by 15 basis points each year?
What will be an ideal response?