Why is a production possibilities frontier bowed out (concave)?
A) The bowed shape reflects constant opportunity cost.
B) The bowed shape reflects decreasing opportunity cost.
C) The bowed shape indicates that opportunity cost at first decreases at a decreasing rate, and then begins to decrease at an increasing rate.
D) The bowed shape indicates that opportunity cost at first increases at a decreasing rate, and then begins to increase at an increasing rate.
E) The bowed shape reflects increasing opportunity cost.
E
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The tools of monetary policy for altering the reserves of commercial banks are the:
a. Tax rate and level of government spending b. Public debt, budget surplus, and budget deficit c. Discount rate, reserve ratio, and open-market operations d. Consumer price index and unemployment rate
To determine the change in the capital stock, the level of new investment must be adjusted for depreciation because some new investment:
A. is not used immediately. B. merely replaces existing, but worn out, capital. C. replaces existing workers. D. is more efficient than existing capital.