Which of the following will not produce an outward shift of the production possibilities curve?
A. An upgrading of the quality of a nation's human resources.
B. The reduction of unemployment.
C. An increase in the quantity of a society's labor force.
D. The improvement of a society's technological knowledge.
Answer: B
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Between 1980 and 2014, income inequality in the United States has increased in part due to expanding international trade. How does expanding international trade contribute to income inequality?
A) It reduces the cost of producing goods and therefore lowers the value of labor's services. B) It allows producers to exploit workers and reduce the wages they are willing to pay workers. C) It increases the demand for a wide array of products which in turn increases prices beyond the reach of average-income individuals. D) Domestic firms can now hire low-skilled workers anywhere in the world, putting U.S. workers in competition with foreign workers. This has caused the wages of unskilled workers to be depressed relative to the wages of other workers.
A change in labor productivity shifts the __________ curve and a change in the exchange rate shifts the __________ curve
A) SRAS; SRAS B) AD; AD C) SRAS; AD D) AD; SRAS E) none of the above