Refer to the Above Figure

question 232

Multiple Choice

Refer to the above figure. How do you describe what is happening as the economy moves from point C to point B?

• A) Previously unemployed resources are now being devoted to the production of wool.
• B) Previously unemployed resources are now being devoted to the production of bread.
• C) The economy has increased its wool production by 30 bales at an opportunity cost of 250 loaves of bread.
• D) The economy has acquired new resources for making bread.

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Definitions:

Government Transfer Programs

Policies and initiatives where the government redistributes income through mechanisms such as social security, welfare, and unemployment benefits.

Social Security

A government program that provides financial assistance to people with inadequate or no income, particularly the elderly, disabled, and survivors.

Medicare

A federal health insurance program in the United States for people aged 65 and older, as well as for some younger individuals with disabilities.

Federal Budget Deficit

The financial shortfall when the federal government's expenditures exceed its revenues in a fiscal year.