Suppose that an economy produces food and clothing, and a technological innovation occurs that enhances the productivity of resources used in producing both goods. Which of the following would be consistent with this situation?
a. There is a parallel outward shift of the PPF.
b. The PPF rotates outward along the food axis, and remains fixed at the point of maximum clothing production.
c. The PPF rotates outward along the clothing axis, and remains fixed at the point of maximum food production.
d. There is a parallel inward shift of the PPF.
a
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An analysis approach that considers the relationship of a proposed policy to social objectives is called ...
a. Contingent valuation b. Cost-effectiveness analysis c. Hedonic pricing d. Positional analysis e. Risk aversion
In the basic closed-economy ISLM model, as the interest sensitivity of money demand increases, fiscal policy has ________ effect on output and monetary policy has ________ effect on output
A) less; less B) more; more C) more; less D) less; more