Consider the production possibilities frontier displayed in the figure shown. A society faced with this curve currently:
A. can only obtain point C.
B. cannot obtain point C.
C. cannot - obtain point B.
D. can only obtain point D or point A.
Answer: C
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Suppose that a new study finds that eating more peanut butter will improve a person's health. As a result
A) the demand for peanut butter will fall. B) the demand for peanut butter will rise. C) the price of peanut butter will fall. D) a smaller amount of peanut butter will be purchased.
Suppose equilibrium national income is currently at $800 billion and intended investment is $100 billion. If an increase in the interest rate reduces intended investment from $100 billion to $75 billion, and the MPC is 0.8, the new level of equilibrium national income will be
a. $500 billion b. $600 billion c. $675 billion d. $775 billion e. $800 billion