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.

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Definitions:

Salary Continuance Programs

Benefits programs that provide employees with a certain percentage of their salary during periods they are unable to work due to disability or illness.

Survivor Benefits

Financial benefits that are paid to the dependents or beneficiaries of a deceased individual, often as part of a pension or insurance plan.

Employer Contributions

Monetary amounts contributed by employers towards employee benefits like pension plans, health insurance, and other welfare schemes.

Employment Insurance

A government program designed to provide financial assistance to individuals who are unemployed through no fault of their own.