Refer to the information provided in Figure 12.4 below to answer the question(s) that follow.
Figure 12.4There are two sectors in the economy, X and Y, and both are in long-run, zero-profit equilibrium at the intersections of S0 and D0.Refer to Figure 12.4. Assume consumer preference changes toward X and away from Y. Ceteris paribus, sector X will likely see ________ and sector Y will likely see ________.
A. capital outflow; capital inflow
B. no change in capital flows; capital outflow
C. capital inflow; capital outflow
D. capital inflow; no change in capital flows
Answer: C
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Supply-siders and Keynesians agree that with the correct approach to stabilization policy, it is possible to reduce both the unemployment rate and the inflation rate
Indicate whether the statement is true or false
If the economy is currently in a recessionary gap,
A) all economists will agree that the economy can remove itself from the recessionary gap without government intervention. B) some economists will argue that the economy can remove itself from the recessionary gap without government intervention. C) no economist will state that the economy can remove itself from the recessionary gap without government intervention. D) all economists will agree that over time the recessionary gap will worsen.
The concept of absolute poverty states that anyone who falls too far behind the average income should be considered poor.
Answer the following statement true (T) or false (F)
All of the following would affect the position of a country's production possibilities curve, except:
A. technological progress. B. the amount of the capital stock. C. the quantity of labor. D. the level of unemployment.