Author Question: Which of the following statements is NOT an assumption underlying the production possibilities ... (Read 37 times)

Davideckstein7 · **on:** Jun 29, 2018

Which of the following statements is NOT an assumption underlying the production possibilities curve?

A) Resources are fully and efficiently employed.
B) Technology is fixed.
C) Production occurs over some specified time period.
D) The amount of resources available for production can be changed quickly.

Question 2

In the classical model, high unemployment due to a change in aggregate demand

A) can persist for an indefinite period of time.
B) will return to its normal level quickly as wages adjust.
C) will persist if due to a supply shock but not if due to a demand shock.
D) never exists because unemployment can never deviate from its normal level.