If scarcity was eliminated
A. all nations would have an absolute advantage in producing all products.
B. the concept of trade-offs would become irrelevant.
C. trade would become unnecessary.
D. opportunity costs would increase.
Answer: 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
The desired reserve ratio is 3 percent. Robert deposits $3,000 in Bank America. Bank America keeps its minimum desired reserves and lends the excess to Fredrica. How much does Bank America lend to Fredrica?
A) $3,000 B) $2,910 C) $300 D) $2,700 E) $900
A primary difference between rebates and coupons?
A) Coupons allow individuals to sort themselves into the high-elasticity group after the sale. B) Neither coupons or rebates are redeemed in high numbers. C) Rebates allow individuals to sort themselves into the high-elasticity group after the sale. D) Coupons are legal and rebates are illegal.
The two Keynesian assumptions in the aggregate supply and aggregate demand model are the importance of:
a. aggregate demand and the stickiness of wages and prices. b. aggregate supply and the stickiness of wages and prices. c. aggregate demand and the flexibility of wages and prices. d. aggregate supply and the flexibility of wages and prices.