When Drawing a Production Possibilities Frontier, Which of the Following

question 77

Multiple Choice

When drawing a production possibilities frontier, which of the following is NOT usually assumed?  

• A) that the quantity of resources is rapidly growing 
• B) that technology is fixed 
• C) that resources can be shifted between production of the two goods 
• D) that resources are fully and efficiently employed

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Definitions:

Depression

A deep and prolonged business downturn; the last one occurred in the 1930s.

Velocity of Circulation

The rate at which money moves through the economy, from transactions of individuals and businesses.

Unemployment Rate

A measure of the percentage of the labor force that is jobless and actively looking for employment.

Expansionary Monetary Policy

A policy by central banks to increase the money supply and decrease interest rates to stimulate economic growth.