The president of the United States promises that the nation's economy will simultaneously produce more defense goods without any decreases in the production of other goods. Under which of the following conditions could such a promise be valid?
A) if the United States were producing at a point on its production possibilities curve
B) if the United States were producing inside its production possibilities curve
C) if the United States were producing to the right of its production possibilities curve
D) None of the above; the production possibilities curve must shift to the right.
B
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The European Union's Common Agricultural Policy (CAP) is, in effect
A) a tariff imposed on agricultural exports. B) a tariff imposed on agricultural imports. C) a subsidy that reduces the cost of agricultural exports. D) a subsidy that increases the cost of agricultural exports. E) a quota that limits production of agricultural goods by EU nations.
Since 1970, the evidence for the U.S. suggests that the average rate of unemployment required to keep inflation constant has been
A) between 1% and 2%. B) between 2% and 3%. C) between 3% and 4%. D) between 9% and 10%. E) none of the above