Figure 18.3Refer to Figure 18.3. In autarky, the maximum amount of pogo sticks that Livonia can produce is:

Which of the following is true in the classical model?

a. A spontaneous increase in spending can cause an increase in output and employment. b. An increase in output and employment can cause a decrease in spending. c. A spontaneous decrease in spending can cause an increase in output and employment. d. An increase in output and employment can cause an increase in spending. e. A spontaneous decrease in spending can cause a decrease in output and an increase in employment.

The conversion of resources into consumer goods or services is called

A. consumption. B. human capital. C. opportunity cost. D. production.