Refer to Figure 2-3. Carlos Vanya grows tomatoes and strawberries on his land. His land is equally suited for growing either fruit. Which of the graphs in Figure 2-3 represents his production possibilities frontier?
A) Graph A
B) Graph B
C) Graph C
D) either Graph A or Graph B
E) either Graph B or Graph C
A
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Expansionary monetary policy refers to the Fed's increasing the money supply and increasing interest rates to increase real GDP
Indicate whether the statement is true or false
Which of the following is incorrect? During the Great Recession U.S:
a. Real GDP fell. b. Unemployment rose. c. Monetary base rose. d. Inflation fell. e. All of the above are correct.
Cartel agreements are difficult to sustain because:
A. it's usually easy to discover if one of the members has cheated. B. cartel members do not face the economic incentives inherent in a prisoner's dilemma. C. it's a dominant strategy for each cartel member to cheat on the cartel agreement. D. the collective payoff to all the cartel members is lower when they all abide by the cartel agreement.
Long-term contracts:
A. reduce transaction costs and increase flexibility. B. can reduce opportunistic behavior. C. increase transaction costs and increase opportunism. D. increase transaction costs.