The Phillips curve
a. illustrates the economy's production possibilities
b. measures the Fed's willingness to stick with a particular interest rate target
c. represents the Fed's choices between inflation and unemployment
d. demonstrates the need for a zero inflation rate
e. explains the natural rate of unemployment
C
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In the 1970s, the Organization of Petroleum Exporting Countries (OPEC) tripled the price of petroleum, causing automobile manufacturers to look for ways to produce more fuel-efficient cars by substituting aluminum and plastic for steel. This was primarily a response to the economic question of:
A) When will each good be produced? B) For whom shall the goods be produced? C) What goods and services should a society produce? D) How should goods and services be produced?
If the United States, at the point where it is currently producing, must give up the production of 500 bicycles (B) to produce 20 additional tractors (T) with the same resources, its opportunity cost may be expressed as:
A) 1/25B = 1T. B) 1B = 1/25T. C) 1B=1T. D) 1B=25T.