What Occurs with a Movement in a Southeast Direction Along

question 19

Multiple Choice

What occurs with a movement in a southeast direction along a production possibilities curve?

• A) a reduction in unemployment
• B) an increase in the production of one good with a decrease in production of the other
• C) an increase in the production of both goods
• D) an increase in unemployment

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Definitions:

Economic Activity

The actions that involve the production, distribution, and consumption of goods and services within an economy.

Recession

A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Equation of Exchange

An economic identity that represents the relationship between the money supply, its velocity, the price level, and the number of transactions conducted, often formulated as MV = PQ.

Identity

The characteristics, attributes, or qualities that make a person or thing unique and distinguishable from others.