In Figure 3-2, a move from a point like B to a point such as D
A. is not possible.
B. can be attained with a more efficient allocation of resources.
C. can be attained if there is an improvement in technology.
D. can be attained if unused resources are put into production.
Answer: C
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If the Federal Reserve purchases $1,000 in bonds and the reserve requirement ratio is 0.2, what will be the total change in reserves at all banks assuming there are no excess reserves?
a. +$500 b. +$5,000 c. -$500 d. -$5,000 e. +$1,000
The level of output determined by the intersection of the short-run aggregate supply curve and the aggregate demand curve:
A. is always below full-employment output. B. is always above full-employment output. C. always corresponds to full-employment output. D. may be above, below, or equal to full-employment output.
Economic growth can be drawn in a diagram by
A. shifting the production possibilities curve out. B. shifting the production possibilities curve in. C. making the production possibilities curve more bowed out. D. making the production possibilities curve less bowed out.
When comparing the U.S. and Mexican car assembly industries, the disadvantage of higher U.S. wages is offset by
A) Mexican trade barriers. B) trade adjustment assistance in the United States. C) higher productivity in the United States. D) a lower opportunity cost in Mexico.