Allocative Efficiency Is Achieved When

question 61

Multiple Choice

Allocative efficiency is achieved when

• A)a point beyond the production possibilities curve is reached.
• B)technological change occurs.
• C)the economy is producing on its production possibilities curve.
• D)the maximum amounts of the most desired goods and services are being produced.

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Definitions:

Misery Index

An economic indicator created by adding the unemployment rate to the inflation rate, intending to measure the health of a country's economy.

Year

A period of time consisting of 12 months or 365 days, used as a basic unit of time to calculate longer or shorter periods.

Hyperinflation

An extremely rapid and out of control inflation rate where prices increase exponentially over a short period, severely eroding the real value of money.

Creeping Inflation

A situation in which the inflation rate is low and increases slowly over a period of time.