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Chapter 10: Q. aFCT (page 215)

Has China's production possibilities curve been shifting outward or inward were the past 40years? Explain your answer

Short Answer

Expert verified

Every point along the curve is efficient; points shifting outward the curve are unobtainable or inefficient.

Step by step solution

01

Given Information

The assembly possibilities frontier model illustrates for a nation's leaders what goods to produce and what is to be given to the market.

Explore how shifts within the economy cause shifts within the assembly possibilities curve ofa country using real-world

02

Explanation

Given the actual fact that resources are scarce, we have got constraints, which is what the curve shows us. When the economy grows and each one other things remain constant, we are ready to produce more, so this may cause a shift within the assembly possibilities curve outward, or to the correct. is that if market would to say no, the curve would obviously shift to the left. When the curve shifts outward, or to the right, meaning output is increasing.

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Most popular questions from this chapter

Take a look at the panel (b) of Figure 10-6. If the Federal Reserve seeks to prevent secular deflation from taking place as a consequence of economic growth, how should it change the quantity of money in circulation? How would this policy action prevent secular deflation?

How are deficiencies in the U.S. river system affecting the extent to which the U.S. long-run aggregate supply curve shifts rightward each year?

This year, a nation's long-run equilibrium real GDP and price level both increased. Which of the following combinations of factors might simultaneously account for botb occurrences?

a. An isolated earthquake at the beginning of the year destroyed part of the nation's capital stock, and the nation's government significantly reduced its purchases of goods and services.

b. There was a technological improvement at the end of the previous year, and the quantity of money in circulation rose significantly during the year.

c. Labor productivity increased throughout the year, and consumers significantly increased their total planned purchases of goods and services.

d. The capital stock increased somewhat during the year, and the quantity of money in circular. tion declined considerably.

Suppose that during the past 3years, equilibrium real GDP in a country rose steadily, from 450 billion to500 billion, but even though the position of its aggregate demand curve remained unchanged, its equilibrium price level steadily declined, from 110to 103. What could have accounted for these outcomes, and what is the term for the change in the price level experienced by this country?

Suppose that there is a sudden rise in the price level. What will happen to economywide planned spending on purchases of goods and services? Why?
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