If an economy is operating inside its production possibilities curve for tanks and bread:
a. scarcity does not exist
b. all resources are being used efficiently.
c. production of bread can only increase by sacrificing the production of tanks.
d. production of bread and tanks can both increase.
Answer: d. production of bread and tanks can both increase.
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
On the graph above, unplanned inventory investment is negative at point ________
A) A B) B C) G D) H E) none of the above
The Coase Theorem implies that when there are no costs to trading, _____
a. resources will move to their most valued uses, depending upon who gets the initial property rights b. resources will move to their most valued uses, regardless of who gets the initial property rights c. resources might be misallocated, depending upon the who gets the initial property rights d. resources might be misallocated, regardless of who gets the initial property rights
Stock prices increase when expected future dividends ________, interest rates ________, and/or the risk premium ________.
A. decrease; decrease; increases B. increase; increase; decreases C. increase; decrease; decreases D. increase; increase; increases