The Keynesian transmission mechanism could be blocked by either interest-insensitive investment or by the liquidity trap

The production possibilities frontier itself illustrates

A) all goods that can be produced by an economy. B) the combination of goods and services that can be produced efficiently. C) all goods and services that are desired but cannot be produced due to scarce resources. D) all possible production of capital goods.

Attempts to fine-tune the economy through shifts in fiscal and monetary policy

A) cannot alter the level of unemployment but may change the price level. B) may not do any good but certainly do no harm. C) produce greater stability, but only at the cost of an ever-increasing national debt. D) will increase rather than reduce instability if the policy makers lack adequate information.