Classify The Statement Below As Positive Or Normative. The Federal Reserve Should Reduce The Rate Of Money Growth.

Classify the statement below as positive or normative. The Federal Reserve should reduce the rate of money growth.

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Macroeconomics

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September 3, 2023

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A model can be accurately described as a

a. theoretical abstraction with very little value.
b. device that is useful only to the people who created it. c. realistic and carefully constructed theory.
d. simplification of reality.

Economic models

a. are not useful because they omit many real-world details.
b. are usually composed of diagrams and equations.
c. are useful because they do not omit any real-world details.
d. are usually plastic representations of the economy.

The production possibilities frontier is a graph that shows the various combinations of output that an economy

a. should produce.
b. wants to produce.
c. can produce.
d. demands.

An economy’s production of two goods is efficient if

a. all members of society consume equal portions of the goods.
b. the goods are produced using only some of society’s available resources.
c. it is impossible to produce more of one good without producing less of the other.
d. the opportunity cost of producing more of one good is zero.

Unemployment would cause an economy to

a. produce inside its production possibilities frontier.
b. produce on its production possibilities frontier.
c. produce outside its production possibilities frontier.
d. experience an inward shift of its production possibilities frontier.

On a bowed production possibilities frontier, as you move down along the curve

a. more of one good must be given up to receive one unit of the other good.
b. the available production technology does not change.
c. the opportunity cost increases.
d. All of the above are correct.

Tennis Rackets: 100, 200, 300
Tennis Balls: 8000, 6500, ???

What is ??? if the PPF is bowed outward?
a. 6000.
b. 5500.
c. 5000.
d. 4500.

A production possibilities frontier can shift outward if

a. government increases the amount of money in the economy.
b. there is a technological improvement.
c. resources are shifted from the production of one good to the production of the other good.
d. the economy abandons inefficient production methods in favor of efficient production methods.

The production possibilities frontier is used to illustrate some basic economic ideas, including

a. scarcity.
b. opportunity cost.
c. economic growth.
d. All of the above are correct.

Shoes: 800, 600, 400, 200, 0
Socks: 0, 400, 700, 900, 1000

What is the opportunity cost to Footville of increasing the production of shoes from 400 to 600?

a. 400 socks
b. 300 socks
c. 200 socks
d. 100 socks

Shoes: 800, 600, 400, 200, 0
Socks: 0, 400, 700, 900, 1000

Which of the following statements is correct?

a. The opportunity cost of an additional 200 shoes is constant at 200 socks.
b. The opportunity cost of an additional 200 shoes is constant at 300 socks.
c. Footville’s production possibilities frontier is a straight, downward-sloping line.
d. The opportunity cost of an additional 200 shoes increases as more shoes are produced.