Suppose That an Economy Is Currently Producing at a Point

question 50

Multiple Choice

Suppose that an economy is currently producing at a point that lies inside of its production possibilities set. Which of the following would best explain this circumstance?

• A) The prevailing level of technology prevents the economy from producing at a point closer to the frontier of the production possibilities set.
• B) The economy is experiencing a high level of unemployment.
• C) The economy does not have enough resources to produce at a point closer to the frontier of the production possibilities set.
• D) Any of the above statements could explain this situation.
• E) None of the above statements could explain this situation.

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Definitions:

Cooperative Federalism

A concept of federalism wherein national, state, and local governments work together to solve problems and create policies.

Federal System

A form of government in which power is divided between a central authority and several regional or state governments.

Unitary Systems

A form of government where a single central authority has the ultimate power, with any administrative divisions (if they exist) subservient to it.

Confederal Systems

Political structures in which states or regions retain considerable independence and powers, with the central government exercising only limited authority, primarily in foreign affairs and defense.