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A. 4 percentage points of unemployment B. 6 percentage points of unemployment C. 6 percentage points of inflation D. 4 percentage points of inflation Ans: C AACSB: Analytic Bloom’s: Apply Difficulty: 03 Hard Learning Objective: 02-01 Topic: The Production Possibility Model Feedback: The opportunity cost is what must be given up. In this case, to reduce unemployment from 8 percent to 4 percent, inflation must rise from 4 percent to 10 percent. The change in the inflation rate is the opportunity cost of lowering unemployment. [Question] 12. Investment in capital goods is one way to increase the standard of living in the future. Investment in capital goods, however, means that we must forgo consumption today. One of the trade-offs facing an economy is consumption today and consumption in the future. The following table presents such a trade-off. With this information we know that the opportunity cost of which of the following is the greatest?

A. increasing current consumption from 750 to 800 B. increasing current consumption from 650 to 750 C. increasing current consumption from 600 to 650 D. increasing current consumption from 550 to 600 Ans: A AACSB: Analytic Bloom’s: Apply Difficulty: 03 Hard Learning Objective: 02-01 Topic: The Production Possibility Model Feedback: The opportunity cost of increasing current consumption increases as current consumption rises. The opportunity cost of increasing consumption from 750 to 800 is 160 future © 2017 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

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Test Bank for Economics 10th Colander  

Test Bank Economics 10th Edition Colander 2017 (Test Bank Download) (9781259193156) (1259193152). Instant access. All chapter are included....

Test Bank for Economics 10th Colander  

Test Bank Economics 10th Edition Colander 2017 (Test Bank Download) (9781259193156) (1259193152). Instant access. All chapter are included....