Exhibit 2-3 Production Possibilities Curve Data According to the Data Given in Exhibit 2-3, the Production

question 17

Multiple Choice

Exhibit 2-3 Production possibilities curve data $$\begin{array} { | l | r | r | r | r | r | } \hline & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \\\hline \text { Capital goods } & 0 & 1 & 2 & 3 & 4 \\\text { Consumer goods } & 20 & 18 & 14 & 8 & 0 \\\hline\end{array}$$ According to the data given in Exhibit 2-3, the production of 1 unit of capital goods and 20 units of consumer goods:

• A) is possible but would be inefficient.
• B) may be a result of unemployment.
• C) may be a result of unused natural resources.
• D) is not feasible with current resources and technology.

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Definitions:

CPI

Stands for Consumer Price Index, which measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

GDP Deflator

A benchmark for evaluating the price levels of all new, home-produced, end-use goods and services within an economic system.

Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services over time.

Inflation Rate

The percentage rate at which the general level of prices for goods and services is rising annually.