Suppose that an economy is currently producing at a point that ...

[aabwk4]

Suppose that an economy is currently producing at a point that lies inside of its production possibilities set. Which of the following would best explain this circumstance?
 
  A) The prevailing level of technology prevents the economy from producing at a point closer to the frontier of the production possibilities set.
  B) The economy does not have enough resources to produce at a point closer to the frontier of the production possibilities set.
  C) The economy is experiencing a high level of unemployment.
  D) Any of the above statements could explain this situation.
  E) None of the above statements could explain this situation.

Question 2

Which of the following produces a movement along the aggregate demand curve and does not shift the aggregate demand curve?
 
  A) a change in government expenditures on goods and services
  B) a change in monetary policy
  C) a change in the price level
  D) a change in foreign incomes
  E) a change in expectations about the future

[mariahkathleeen]

Answer to Question 1

C

Answer to Question 2

C

[aabwk4]

Excellent

[mohan]

YES! Correct, THANKS for helping me on my review