Refer to the accompanying figure. At point D, the opportunity cost of making milk is:
A. high because productive resources that are better-suited to making movies are being used to make milk.
B. low because the economy is specializing in making milk.
C. high because productive resources that are better-suited to making movies are not being used to make milk.
D. high because the economy is not operating efficiently.
Answer: A
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If the U.S. government decided to pay off the national debt by creating money, what would be the most likely effect?
a. a substantial reduction in real GDP b. a deflationary collapse c. rapid inflation d. an increase in the trade surplus
The growth of real GDP per person in the United States between 1960 and 2016 was the result of:
A. neither the growth in average labor productivity nor the share of population employed. B. growth in both average labor productivity and the share of population employed. C. growth in the share of population employed only. D. growth in average labor productivity only.
Suppose real disposable income increases by $1,000. Given this information, we know that
A) consumption will generally increase by more than $1,000. B) saving will generally increase by exactly $1,000. C) consumption will generally increase by exactly $1,000. D) consumption will generally increase by less than $1,000.
In the figure above, the shift in the supply of loanable funds curve from SLF1 to SLF2 could be the result of
A) an increase in expected rate of profit. B) a decrease in disposable income. C) an increase in expected future disposable income. D) an increase in the real interest rate. E) a decrease in wealth