Suppose there is no unemployment in the economy and society decides that it wants more of one good. Which of the following statements is true?
A) It can only achieve this with an advance in technology.
B) It will have to give up production and consumption of some other good.
C) It can only achieve this with an increase in resource supplies.
D) It can increase output without giving up another good.
B
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Why would making a permanent change in a monetary aggregate have an effect on exchange rates in a nation?
a. Permanent rates are mostly set by short-run fluctuations in the rate of interest caused by monetary instability. b. A permanent change is never quite as permanent as policy makers claim-people form expectations on past performance rather than declarations. c. The central bank is always aware of the effect on exchange rates as it formulates policy, so it is very careful to make small permanent changes that have no effect on exchange rates. d. Traders form expectations of future exchange rates based on the anticipated long-run effects of monetary operations
The East Asian model's approach to foreign trade has been
a. to give major incentives to exports b. to allow the market to determine whether firms export or import c. to follow import substitution policies d. to maintain state control over foreign trade operations e. none of the above