Which of the Following Is Not True When the Economy

question 76

Multiple Choice

Which of the following is not true when the economy is fully employed and government bonds are sold to finance greater government spending?

• A)This pushes the economy along its production possibilities curve toward more public sector goods.
• B)This action results in crowding out.
• C)The government is running a structural deficit.
• D)The government is running a cyclical deficit.

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Definitions:

Pharmaceutical Industry

A sector of the health care system that discovers, develops, produces, and markets drugs or pharmaceuticals for use as medications.

Creative Destruction

A concept in economics which suggests that new innovations destroy old industries and create new economic structures.

Decreasing-Cost Industry

An industry where the unit cost of production decreases as the industry's output increases, often due to economies of scale.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the number of units produced.