Along its production possibilities frontier (PPF) an economy can produce 0X and 15Y, 10X and 10Y, 20X and 5Y, or 30X and 0Y. It follows that the PPF is

Suppose that government spending increases in the Keynesian macroeconomic model. What will happen to the aggregate demand curve?

Select one: a. The entire aggregate demand curve will shift up. b. The entire aggregate demand curve will shift down. c. The aggregate demand curve will rotate clockwise. d. The aggregate demand curve will not change.

Do government bureaucracies misallocate resources? If so, how and why? Can you list one possible way to limit the negative effects of special interests such as bureaucracies?

What will be an ideal response?