The production possibilities curve represents the set of all
A) nonlinear forms of production in the economy.
B) combinations of goods and services that can be used in the production of other goods and services.
C) factors of production that can be used to manufacture goods and services.
D) feasible combinations of goods that the economy can produce given that a nation's resources are fully employed.
D
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Country A specializes in the production of automobiles and 45% of its population works in the automobile manufacturing industry. A sharp increase in world prices for automobiles led to a boom in the automobile manufacturing industry in Country A
However, the automobile manufacturers overestimated the demand for automobiles. This led to overproduction which resulted in a large stock of unsold cars. Which of the following is likely to happen in the near future? A) Investment in Country A will increase. B) The supply of credit in Country A will increase. C) Household consumption in Country A will increase. D) The unemployment rate in Country A will increase.
The aggregate consumption function is C = 1,000 + 0.9Yd. If income is $3,600 and net taxes are $600, consumption equals
A. 2,400. B. 3,400. C. 3,700. D. 4,000.