Automatic stabilizers tend to exaggerate the severity of business cycles.

Which of the following ideas is illustrated by the production possibilities curve [PPC]?

a. There are no limits on the total production feasible in an economy. b. An economy need not decrease the production of one commodity to increase the production of another. c. It is possible to satisfy unlimited wants in an economy through proper investment in research and development. d. When an economy chooses to produce a combination of goods and services, other combinations of goods and services are sacrificed. e. An economy can specialize in the production of only one good.

Which of the following is not an argument used in favor of protectionism?

a. To preserve national security. b. To reduce prices paid by domestic consumers. c. To protect against "unfair" competition because of cheap foreign labor. d. To protect an "infant" industry. e. To protect domestic jobs.