In the above figure, which of the following is TRUE regarding the movements from point A to B and from point C to D?
I) The movement from point A to B shows that the economy has chosen to produce 100 more jets.
II) The movement from point C to D shows that the economy has chosen to produce 100 more jets.
III) The movement from point A to B and from point C to D have the same opportunity cost.
A) I and II
B) I and III
C) II and III
D) I, II and III
A
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Under a fixed exchange rate regime, if a central bank must intervene to purchase the domestic currency by selling foreign assets, then, like an open market sale, this action ________ the monetary base and the money supply, causing the interest rate
on domestic assets to ________. A) increases; rise B) increases; fall C) reduces; rise D) reduces; fall
The average price of goods and services in the economy is also known as
A) the price level. B) the inflation rate. C) a market basket. D) the cost of living.