Relate the declaration of war by the United States against terrorism to the production possibilities curve.
What will be an ideal response?
ANS:
As the need or desire for military goods and services increases, the nation will need to devote more resources to military use. This can be represented by a movement along a production possibilities curve with military goods on one axis and consumer goods or investment on the other axis.
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We would expect that a fall in labor supply will have a proportionately larger effect on the market wage rate when
A) capital goods exist that can replace many of the workers. B) the product produced in the industry has several close substitutes. C) the product produced in the industry makes up a large portion of most families' budgets. D) labor represents a relatively small portion of total costs.
_____ is the primary reason that explains why some nations are richer than the others
a. A democratic government b. A strong judicial system c. Access to education d. Private ownership e. A stable currency