Answer the following questions true (T) or false (F)
1. If a country is producing efficiently and is on the production possibilities frontier, the only way to produce more of one good is with an advance in technology.
2. Consider a country that produces only two goods: pineapples and tractors. Suppose it is possible for this country to increase its production of pineapples without producing fewer tractors. In this case, its current output combination is inefficient.
3. Any output combination inside a production possibilities frontier is associated with unused or underutilized resources.
1. FALSE
2. TRUE
3. TRUE
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Rent ceilings are difficult to abolish because
A) they create such large profits for landlords. B) current renters offer political support for ceilings. C) the government doesn't like to give up the tax revenues associated with ceilings. D) they result in an efficient use of resources. E) landlords lobby to keep them in place.
Other things constant, a decrease in nominal GDP will generally
a. increase the demand for money. b. decrease the demand for money. c. increase the nominal interest rate. d. decrease the money supply.