If the Economy Is Operating at Full Employment and Using

question 28

Multiple Choice

If the economy is operating at full employment and using resources efficiently, then an increase in spending for homeland security this year will:

• A)require that resources be reallocated to homeland security services without sacrificing any alternative goods and services.
• B)be possible if resources are reallocated to homeland security services, but it will also mean that the output of some other goods and services will have to fall.
• C)be impossible.
• D)be possible only if there is an improvement in technology or more resources made available.