Ceteris paribus, economic growth involves an:
a) Increase in imports.
b) Expansion of production possibilities.
c) Increase in GDP due to inflation.
d) Increase in GDP due to inflation.
Answer: b) Expansion of production possibilities.
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"An increase in the price of gasoline will increase the demand for hybrid vehicles." This statement is an example of a positive economic statement
Indicate whether the statement is true or false
In spring 2008, the U.S. Congress proposed to tax oil companies because of their near-monopoly status. This could have the unintended consequence of
A) increasing the equilibrium price by more than the tax. B) destroying the oil companies and leaving the United States without oil. C) increasing the profit of the best oil company. D) decreasing the power of the U.S. Congress.