How does the production possibilities frontier illustrate scarcity?
What will be an ideal response?
The unattainable combinations of production that lie beyond the PPF illustrate the concept of scarcity. There simply are not enough resources to produce any of these combinations of outputs. Additionally, while moving along the PPF to increase the production of one good requires that the production of another good be reduced, which also illustrates scarcity.
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If American demand for purchases of British goods has decreased, how would you expect the equilibrium exchange rate in the market for dollars to respond? Support your answer graphically
What will be an ideal response?
The exogenous variable in the monetary policy curve is ________
A) the policy parameter, ? B) the real interest rate C) the autonomous component, D) the federal funds rate E) the inflation rate