Compare two economies A and B that start out with identical production possibilities curves. Economy A chooses an efficient point with 6 consumption goods and 3 capital goods, while economy B also chooses an efficient point, but with 4 consumption goods and 5 capital goods. In the future we can predict:
a. economy A will operate inefficiently.
b. economy B will operate inefficiently.
c. economy A and economy B will grow equally fast.
d. economy A will grow faster than economy B.
e. economy B will grow faster than economy A.
e
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If government spending is $650 billion while government revenue is $950 billion, the government is said to have a
A) $300 billion budget surplus. B) $300 billion budget deficit. C) $1,600 billion budget balance. D) $950 billion budget deficit.
Refer to the table above. If you are told that Country B is very much richer than Country A, then the correct answer is
A) country B will export good S. B) country A will export good S. C) both countries will export good S. D) trade will not occur between these two countries. E) both countries will import good S.