The Diagram Below Shows Alternate Paths for Two Hypothetical Economies,each

question 8

Multiple Choice

The diagram below shows alternate paths for two hypothetical economies,each starting with GDP of $1 billion.Assume that Area 1 is equal to Area 2. FIGURE 25-1 Refer to Figure 25-1.Which of the following statements best describes what we know about the difference between the two economies at Year 0?

• A)Economy A has a higher level of real GDP at Year 0 than Economy B.
• B)Economy B's households are consuming a larger percentage of GDP than Economy A's households.
• C)There is no opportunity cost for economic growth for Economy B at Year 0.
• D)There is no opportunity cost of economic growth for Economy A at Year 0.
• E)Economy A's households are consuming a larger percentage of GDP than Economy B's households.

---

Definitions:

Rushmore

A 1998 American coming-of-age comedy-drama film directed by Wes Anderson, about an eccentric teenager and his friendship with a wealthy industrialist.

Comic-Book Adaptation

A film, TV show, or other media work that is based on characters or stories from comic books.

Mel Gibson

An Australian-American actor, director, and producer known for his roles in action films and for directing critically acclaimed movies.

The Passion Of The Christ

A 2004 film directed by Mel Gibson depicting the final hours and crucifixion of Jesus Christ, noted for its graphic portrayal of violence and its emotional depth.