If production in the economy is efficient, then changes in market prices
A. Move us to a point above the production possibilities curve.
B. Move us from a point below the production possibilities curve to a point on the production possibilities curve.
C. Have no effect on our position on the production possibilities curve.
D. Move us along the edge of the production possibilities curve.
Answer: D
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When comparing the autonomous expenditure multiplier in a closed-economy model to the autonomous expenditure multiplier in an open-economy model it can be concluded that
a. the multiplier in the open-economy model will be larger than in the closed-economy model. b. the multiplier in the open-economy model will be smaller than in the closed-economy model. c. both multipliers are the same. d. None of the above.
Tax avoidance reduces the federal government's revenue flow
a. True b. False