Consider the production possibilities frontier displayed in the figure shown. A society should choose to produce:
A. at point C because it is the safest.
B. at point B because it represents the most the society can produce.
C. at any point that produce some of each good.
D. at any point on the frontier rather than inside it.
D. at any point on the frontier rather than inside it.
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Discretionary fiscal policy is best defined as:
a. the deliberate change in tax laws and government spending to change equilibrium income. b. the deliberate manipulation of the money supply to expand the economy. c. the arbitrary fluctuation in tax laws and budget requirements. d. the automatic change in certain fiscal instruments when real GDP changes. e. the policy action taken by the Congress to reduce the federal budget deficit.
Patents stimulate innovation by
a. providing incentives to incur research and development costs b. guaranteed profits for those who innovate c. prosecuting anyone who purchases the good protected by the patent d. providing tax breaks to investors e. increasing the interest rate on borrowed funds