Which of the Following Most Accurately Indicates the Implications of an Economy's

question 39

Multiple Choice

Which of the following most accurately indicates the implications of an economy's production possibilities curve?

• A) If all the resources of an economy are being used efficiently, more of one good can be produced only if less of another good is produced.
• B) If all the resources of an economy are being used efficiently, it is generally possible to produce more of one good without having to sacrifice the production of other goods.
• C) Over time, it is generally impossible for a country to expand its production of goods.
• D) An economy will automatically move toward a point that lies outside of the production possibilities constraint unless proper government policy constrains production.

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Definitions:

Credit Agencies

Organizations that assign credit ratings for issuers of certain types of debt securities, with the ratings based on the issuer's ability to pay back debt.

Financial Statements

Formal records of the financial activities and position of a business, individual, or other entity, typically comprising the balance sheet, income statement, and cash flow statement.

Compensating Balances

Minimum balance requirements imposed by banks on certain accounts, which businesses must maintain in order to receive some form of credit or service.

Prompt Payment Discounts

Incentives provided by sellers to encourage buyers to pay their invoices early.