The Production Possibilities Frontier Model Shows That

question 134

Multiple Choice

The production possibilities frontier model shows that

• A)if consumers decide to buy more of a product, its price will increase.
• B)a market economy is more efficient in producing goods and services than is a centrally planned economy.
• C)economic growth can only be achieved by free market economies.
• D)if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good.

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Definitions:

Fixed Percentage

A predetermined, unchanging fraction or rate used in various financial contexts, such as a fixed-rate mortgage.

External Financing

Funds a company seeks from outside sources, such as loans, investor equity, or bonds, to finance its activities.

Internal Growth Rate

The maximum rate at which a company can expand its operations using only internally generated revenue and without resorting to external financing.

Equity Multiplier

A financial ratio that measures the portion of a company's assets financed by stockholders' equity, reflecting financial leverage.