Producers typically face increasing marginal costs of production. Thus, their production possibilities frontier would
A) slope upward.
B) bend inward.
C) bend outward.
D) appear as a straight line.
C
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
If the Fed sells government bonds on the open market, which of the following is likely to occur?
A. The money supply will expand. B. The market rate of interest on government bonds will increase. C. The market rate of interest on corporate bonds will decrease. D. The amount of investment spending will increase.
If decreased government borrowing drives down real interest rates in the United States,
a. private investment will tend to decline. b. the dollar will depreciate leading to an increase in net exports. c. an inflow of capital will cause the dollar to depreciate. d. All of the above are true.
Which of these elasticities is the least elastic?
A. 1 B. 10 C. 100 D. 0.9