IVY software FECN review Latest Update -

IVY software FECN review Latest Update - Questions and 100% Verified Correct Answers Guaranteed A+

A deflationary gap occurs when an economy's

Select one:

• real GDP is greater than its potential real GDP.
• real GDP is less than its potential real GDP.
• real GDP is equal to its potential real GDP.
• nominal GDP is less than its real GDP. - CORRECT ANSWER: real gdp is less than

potential gdp

A graph that shows the combinations of two goods that the economy can produce given the available scarce resources and available technology is called a

Select one:

• demand curve
• supply curve
• Edgeworth box
• production possibilities frontier. - CORRECT ANSWER: production possibilities

frontier

A permanent decrease in productivity in the economy causes

Select one:

• the long-run aggregate supply curve to shift to the left.
• the aggregate demand curve to shift to the south-west.
• the aggregate demand curve to shift to the north-east.
• the long-run aggregate supply curve to shift to the right. - CORRECT ANSWER: the

long-run aggregate supply curve to shift to the left.

A permanent increase in productivity in the economy causes

Select one:

• the long-run aggregate supply curve to shift to the left.
• the aggregate demand curve to shift to the south-west.
• the aggregate demand curve to shift to the north-east.
• the long-run aggregate supply curve to shift to the right. - CORRECT ANSWER: the

long run aggregate supply curve to shift to the right

A production process has constant economies of scale if

Select one:

• average total cost does not change as production increases.
• average total cost decreases as production increases.
• average total cost increases as production increases.

d. average total cost increases as production decreases. - CORRECT ANSWER:

average total cost does not change as production increases. 1 / 2

An increase in the required reserve deposit ratio causes the money supply to:

Select one:

• increase.
• decrease.
• Not change.
• Not enough information to answer the question.

Feedback - CORRECT ANSWER: decrease

An item that buyers give to sellers when they want to purchase goods and services is called

Select one:

• a medium of exchange.
• a unit of account.
• a store of value.

d. liquidity. - CORRECT ANSWER: a unit of account

Assume a production possibilities frontier for pickup trucks and big Mac hamburgers.The economy is producing 60 big Mac hamburgers and 50 pickup trucks (point 60, 50).What is the opportunity cost of producing an additional 20 big Mac hamburgers (point

80, 30)?

• Zero pickup trucks
• Two pickup trucks
• Five pickup trucks
• 20 pickup trucks

e. None of the above. - CORRECT ANSWER: 20 pickup trucks

Assume the economy is currently at potential real gross domestic product. Which of the following would put the economy in a deflationary gap?

Select one:

• lower real interest rates
• decrease in income abroad
• an increase in government purchases

d. higher wages - CORRECT ANSWER: decrease in income abroad

Economists frequently say there's no such thing as a free lunch. What do they mean by this?

Select one:

• Your friends are cheap and never offer you lunch for free
• Even if someone literally offers you a free lunch, there is an opportunity cost to the

resources that are used to produce your free lunch

• Productive resources are examples of natural monopolies

d. Resources are never free. - CORRECT ANSWER: Even if someone literally offers

you a free lunch, there is an opportunity cost to the resources that are used to produce your free lunch

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