Refer to the Graph Below

question 52

Multiple Choice

Refer to the graph below. As you move from point A to point B:

• A)production efficiency is increased because we have more of good X.
• B)production efficiency is decreased because we have less of good Y.
• C)production efficiency is decreased because we are no longer on the production possibility curve.
• D)the change in efficiency is unclear.

---

Definitions:

Automatic Stabilizers

Economic policies and programs, like unemployment benefits and progressive taxation, that automatically help stabilize economic fluctuations without direct governmental intervention.

Economic Recovery

A period of increasing business activity signaling the end of a recession, marked by a rise in GDP, employment, and consumer spending.

Transfer Payments

These are payments made by the government to individuals or other entities without expecting any goods or services in return, such as social security benefits or unemployment compensation.

Federal Income Tax

A tax levied by the United States federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.