Suppose an economy produces milk and honey, and milk is plotted along the horizontal axis of the production possibilities frontier
If the production in the economy is centrally planned (and not market oriented) so that the MRS for the current production level is 3 but the MRT is 2, then there will be an excess ________ for milk and an excess ________ for honey. A) demand, supply
B) demand, demand
C) supply, demand
D) supply, supply
E) The market is in equilibrium, and there are no imbalances in supply or demand.
A
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Regarding the role of saving in economic growth, studies indicate that
A) there is both a positive and a negative relationship between economic growth and saving. B) there is a positive relationship between economic growth and saving. C) there is a negative relationship between economic growth and saving. D) there is no relationship between economic growth and saving.
Fiscal policy to solve short-run economic problems supports the Keynesian notion of
A) there being no government role in the economy. B) the need for autocratic rule. C) an active government role in the economy. D) the long-run nature of the economy.