A nation's production possibilities curve is bowed out from the origin because:
A. resources are not generally equally efficient in producing every good.
B. the originator of the idea drew it this way and modern economists follow this convention.
C. resources are scarce.
D. wants are virtually unlimited.
Answer: A
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The United States imports t-shirts because
A) it is a dangerous job to produce them. B) the United States has a lower opportunity cost of production. C) the United States must import goods and services from other countries so that they can develop economically. D) foreign economies have an absolute advantage in their production. E) foreign nations have a lower opportunity cost of production.
Under a constant growth rate of money rule of 4 percent in an economy in which Real GDP grows at an average rate of 3 percent and velocity is constant, the inflation rate is
A) 7 percent. B) -7 percent. C) 1 percent. D) -1 percent. E) constant at zero.