The above figure shows the PPF for a country that produces computers and computer factories. The nation's production possibilities frontier is PPF0. At which of the following production points would the economy grow most rapidly?
A) Point A
B) Point B
C) Point C
D) It makes no difference among the three points because they are all production efficient.
E) More information is needed to answer the question.
A
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The economic way of thinking would approach the question "Is this industry competitive?" by
A) counting the number of firms in the industry. B) comparing the ratio of prices to costs across the industry. C) assessing the freedom of entry into the industry. D) evaluating the actual structure of the industry to the competitive standards articulated in antitrust legislation.
Suppose the Federal Reserve decides to increase the proportion of deposits that banks must hold from 1% to 3%. Which monetary policy tool is it using?
a) Reserve requirements b) Discount rate c) Open market operations d) Infrastructure spending