The Figure Given Below Represents the Production Possibilities Curve for Goods

question 52

Multiple Choice

The figure given below represents the production possibilities curve for goods and services in an economy.Figure 2.3

-Refer to Figure 2.3. The movement from Curve X to Curve Y indicates a(n) :

• A)contraction in the production of goods.
• B)contraction in the production of services.
• C)expansion in the ability to produce both goods and services.
• D)expansion in the ability to produce goods.
• E)expansion in the ability to produce services.

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Definitions:

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, usually visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Automatic Stabilizers

Economic mechanisms, such as progressive taxation and welfare, that automatically adjust to counteract economic fluctuations without the need for explicit government intervention.

Unemployment Compensation

A government program that provides financial assistance to individuals who have lost their jobs through no fault of their own.

Public Debt

The total amount of money that a government owes to creditors, typically as a result of borrowing to finance its expenditures.