The principle of increasing opportunity cost leads to
A) a production possibilities frontier (PPF) that is bowed inward from the origin.
B) a production possibilities frontier (PPF) that is bowed outward from the origin.
C) an inward shift of the production possibilities frontier (PPF).
D) an outward shift of the production possibilities frontier (PPF).
B
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When aggregate planned expenditure exceeds real GDP, there are unplanned ________ in inventories, and firms ________ production, so that real GDP ________
A) increases; increase; increases B) increases; decrease; decreases C) decreases; decrease; decreases D) decreases; decrease; increases E) decreases; increase; increases
Many economists believe
A) the Fed could have reduced the severity of the Great Depression by raising interest rates. B) the Fed could have reduced the severity of the Great Depression by encouraging banks to make fewer loans to insolvent businesses. C) bank failures increased the severity of the Great Depression. D) the severity of the Great Depression and the policies of the Fed were unrelated.
A U.S. fast food restaurant chain sells dollars for Argentinean pesos and then uses the pesos to buy Argentinean beef. Which of the following do these transactions increase?
a. Argentinean net capital outflow and Argentinean net exports b. only Argentinean net exports c. only Argentinean net capital outflow d. neither Argentinean net exports nor Argentinean capital outflow
There will be gains from trade when:
A. Both buyer and seller attach the same value to the product B. A buyer values a product less highly than the seller C. A buyer values a product more highly than the seller D. Money is used as a medium of exchange