Consider the production possibilities frontier displayed in the figure shown. A society should choose to produce:
A. at any point on the frontier rather than inside it.
B. at any point that produce some of each good.
C. at point C because it is the safest.
D. at point B because it represents the most the society can produce.
Answer: A
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In the foreign exchange market, a balance of payments surplus is represented by:
A) excess supply of dollars. B) excess demand for dollars. C) equilibrium in the foreign exchange market. D) none of the above.
If the actual unemployment rate is less than the natural rate of unemployment, there will be a tendency toward:
a. increased inflation and a leftward shift of the short-run Phillips curve. b. decreased inflation and a rightward shift of the short-run Phillips curve. c. increased inflation and a rightward shift of the short-run Phillips curve. d. decreased inflation and a leftward shift of the short-run Phillips curve.