The price of one currency in terms of another is the

If an economy is operating at a point inside the production possibilities frontier, then

A) society's resources are being inefficiently utilized. B) the PPF curve will shift inward. C) society's resources are being used to produce too many consumer goods. D) economic policy must retard further growth of the economy.

If an economy is experiencing both full employment and price stability, within the Keynesian model, a major tax reduction probably would cause

a. an increase in unemployment in the near future. b. an increase in the general level of prices unless government expenditures are also reduced. c. an increase in the interest rate since individuals will reduce their savings in response to the tax cut. d. a decrease in consumption unless the expected budget deficit is financed by selling bonds to foreigners.