1.Say an economy is producing on its production possibilities frontier (PPF) with a combination of 0...
1.Say an economy is producing on its production possibilities frontier (PPF) with a combination of 0 units of clothing and 100 units of food. This combination is an example of
Select one:
Neither productive efficiency or allocative efficiency
Productive efficiency but probably not allocative efficiency
Allocative efficiency but probably not productive efficiency
Both productive efficiency and allocative efficiency
2. Consider a perfectly competitive firm with an average total cost (ATC) of $26 and an average variable cost (AVC) of $18. If the market price is $16, then in the short run this firm should
Select one:
Increase its market price to at least $26
Shut down
Produce where price is equal to average total cost
Produce where marginal revenue is equal to marginal cost
3. an inflationary gap is consistent with
Select one:
Low GDP growth, high unemployment and low inflation
High GDP growth, low unemployment and high inflation
Low GDP growth, low unemployment and low inflation
High GDP growth, low unemployment and low inflation
4. Consider an economy that is operating below full employment and with low inflation. Which of the following measures might the central bank take to restore full employment?
Select one:
Decrease the cash rate by selling government bonds
Increase the cash rate by selling government bonds
Decrease the cash rate by buying government bonds
Increase the cash rate by buying government bonds
Homework Answers
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1.Say an economy is producing on its production possibilities
frontier (PPF) with a combination of 0...
Figure 1: PPF Production Possibilities Frontier 0 0 Pizza Multiple Choice 1. Refer to the Production...
Figure 1: PPF Production Possibilities Frontier 0 0 Pizza Multiple Choice 1. Refer to the Production Possibilities Frontier (PPF) in Figure 1 on the next page. What is true about point A? (A) It is unattainable (B) Resources are being unused or misallocated (C) Capital exceeds labour in production (D) It is preferable to point B 2. Still referring to Figure 1, what is true about point B? (A) It represents diminishing and increasing opportunity cost (B) It is a...
on 7 According to the AD/AS model, a sudden decrease in business confidence would cause what...
on 7 According to the AD/AS model, a sudden decrease in business confidence would cause what to happen in the short run? et red Select one: out of 2.0 a. the real growth rate to increase and the inflation rate to rise b. the real growth rate to decrease and the inflation rate to fall on C the real growth rate to increase and the inflation rate to fall d. the real growth rate to decrease and the inflation rate...
Here is major macro economic indicators of the economy from 2009 to 2016. 2009 2016 4.3%...
Here is major macro economic indicators of the economy from 2009 to 2016. 2009 2016 4.3% 0.2% Real GDP growth rate Unemployment rate inflation Tax revenues (% of GDP) National Debt to GDP ratio 10% 1.2% 19% 127% 23% -0.8% 27% 180% Government spending over that past decade has remained stable around 20% of GDP. Which of the following policies do you think is best for reversing the current situation? Consider the implications on economic activities of all choices and...
Here is major macro economic indicators of the economy from 2009 to 2016. 2009 2016 43%...
Here is major macro economic indicators of the economy from 2009 to 2016. 2009 2016 43% -0.2% Real GDP growth rate Unemployment rate inflation Tax revenues (% of GDP) National Debt to GDP ratio 10% 1.2% 19% 127% 23% -0.8% 27% 180% Government spending over that past decade has remained stable around 20% of GDP. Which of the following policies do you think is best for reversing the current situation? Consider the implications on economic activities of all choices and...
1. If the economy is at full employment, increases in government spending: A) have a multiplier...
1. If the economy is at full employment, increases in government spending: A) have a multiplier effect on equilibrium output. B) have no effect on the aggregate price level. C) are primarily absorbed by price increases. D) reduce aggregate output. 2. Which of the following measures is NOT an example of discretionary fiscal policy? A) The unemployment compensation program pays out more money as unemployment rates rise. B) Tax rates are increased in the hope of slowing down the rate...
1) Which of the following is an example of a measure of labor productivity
1) Which of the following is an example of a measure of labor productivity?a. Autos get 30 gallons to the mile.b. The growth rate of per capita real GDP is 3.5 percent per year.c. Farm workers produce 30 bushels of wheat per worker per day.d. Wages increase by 3.5 percent per year for 5 years.2) Labor productivity increases whena. the unemployment rate decreases.b. the average output produced per worker during a specified time period decreases.c. the average number of hours...
Table 2.1 Production Possibilities Frontier for the United States Combination A B C D E F...
Table 2.1 Production Possibilities Frontier for the United States Combination A B C D E F G Vaccine doses (millions) Guns 10,000 19,000 24,000 28,000 30,000 31,000 17. According to the information in Table 2.1, what is the opportunity cost of producing the first one million vaccines? (a) 1,000 guns (b) 30,000 guns (e) 31,000 guns (d) one million vaccines (e) five million vaccines 19. In Table 2.1, opportunity costs (a) Increase as more vaccines are produced (b) A reconstanta...
Question 26 With a vertical long run AS curve, any attempt by the government to reduce...
Question 26 With a vertical long run AS curve, any attempt by the government to reduce GDP through decrease in aggregate demand will lead to Select the correct answer below decrease in GDP with no corresponding deflation in the long run decrease in both GDP and the price level in the long run decrease in the price level with no effect on GDP in the long run decrease in the price level with no corresponding decrease in GDP in the...
A supply shock is A. an increase in the rate of inflation as a result of...
A supply shock is A. an increase in the rate of inflation as a result of expansionary fiscal policy, resulting in a leftward shift of the SRAS curve. B. a sudden increase in the price of an important natural resource, resulting in a leftward shift of the SRAS curve. O C. an increase potential GDP caused by a govemment expenditure multiplier, resulting in a leftward shift of the AD curve. D. an increase in both the inflation and the unemployment...
Without cyclical unemployment in the country, which isn’t true? Economy is at max employment level The...
Without cyclical unemployment in the country, which isn’t true? Economy is at max employment level The unemployment rate = 0% economy ‘s unemployment rate is at what we consider its natural rate Inflation rate with CPI shows: % change in the price level from one period to another period Real variables Average price level in one time period The value of intermediate goods is calculated in GDP by: Their value is not counted separately, but included as part of the...
Figure 1: PPF Production Possibilities Frontier 0 0 Pizza Multiple Choice 1. Refer to the Production Possibilities Frontier (PPF) in Figure 1 on the next page. What is true about point A? (A) It is unattainable (B) Resources are being unused or misallocated (C) Capital exceeds labour in production (D) It is preferable to point B 2. Still referring to Figure 1, what is true about point B? (A) It represents diminishing and increasing opportunity cost (B) It is a...
on 7 According to the AD/AS model, a sudden decrease in business confidence would cause what to happen in the short run? et red Select one: out of 2.0 a. the real growth rate to increase and the inflation rate to rise b. the real growth rate to decrease and the inflation rate to fall on C the real growth rate to increase and the inflation rate to fall d. the real growth rate to decrease and the inflation rate...
Here is major macro economic indicators of the economy from 2009 to 2016. 2009 2016 4.3% 0.2% Real GDP growth rate Unemployment rate inflation Tax revenues (% of GDP) National Debt to GDP ratio 10% 1.2% 19% 127% 23% -0.8% 27% 180% Government spending over that past decade has remained stable around 20% of GDP. Which of the following policies do you think is best for reversing the current situation? Consider the implications on economic activities of all choices and...
Here is major macro economic indicators of the economy from 2009 to 2016. 2009 2016 43% -0.2% Real GDP growth rate Unemployment rate inflation Tax revenues (% of GDP) National Debt to GDP ratio 10% 1.2% 19% 127% 23% -0.8% 27% 180% Government spending over that past decade has remained stable around 20% of GDP. Which of the following policies do you think is best for reversing the current situation? Consider the implications on economic activities of all choices and...
1. If the economy is at full employment, increases in government spending: A) have a multiplier effect on equilibrium output. B) have no effect on the aggregate price level. C) are primarily absorbed by price increases. D) reduce aggregate output. 2. Which of the following measures is NOT an example of discretionary fiscal policy? A) The unemployment compensation program pays out more money as unemployment rates rise. B) Tax rates are increased in the hope of slowing down the rate...
Table 2.1 Production Possibilities Frontier for the United States Combination A B C D E F G Vaccine doses (millions) Guns 10,000 19,000 24,000 28,000 30,000 31,000 17. According to the information in Table 2.1, what is the opportunity cost of producing the first one million vaccines? (a) 1,000 guns (b) 30,000 guns (e) 31,000 guns (d) one million vaccines (e) five million vaccines 19. In Table 2.1, opportunity costs (a) Increase as more vaccines are produced (b) A reconstanta...
Question 26 With a vertical long run AS curve, any attempt by the government to reduce GDP through decrease in aggregate demand will lead to Select the correct answer below decrease in GDP with no corresponding deflation in the long run decrease in both GDP and the price level in the long run decrease in the price level with no effect on GDP in the long run decrease in the price level with no corresponding decrease in GDP in the...
A supply shock is A. an increase in the rate of inflation as a result of expansionary fiscal policy, resulting in a leftward shift of the SRAS curve. B. a sudden increase in the price of an important natural resource, resulting in a leftward shift of the SRAS curve. O C. an increase potential GDP caused by a govemment expenditure multiplier, resulting in a leftward shift of the AD curve. D. an increase in both the inflation and the unemployment...
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