Which of the following will shift the production possibilities curve to the right?
A. An increase in the unemployment rate from 6 to 8 percent.
B. A decline in the efficiency with which the present labor force is allocated.
C. A decrease in the unemployment rate from 8 to 6 percent.
D. A technological advance that allows farmers to produce more output from given inputs.
Answer: D
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Expansionary monetary policy will
a. often raise real interest rates in the short run. b. generally reduce aggregate demand in the short run. c. lead to higher nominal interest rates if the expansionary policy persists over a lengthy time period. d. lead to a rapid growth of real GDP if the expansionary policy persists over a lengthy time period.
During the current quarter, a firm produces consumer goods and adds some of those goods to its inventory rather than selling them. The value of the goods added to inventory is
a. not included in the current quarter GDP. b. included in the current quarter GDP as investment. c. included in the current quarter GDP as consumption. d. included in the current quarter GDP as a statistical discrepancy.