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1. According to Heilbroner, there were several forces of change that played an i

ID: 1218330 • Letter: 1

Question

1. According to Heilbroner, there were several forces of change that played an important role in the transition from feudalism to market-based capitalism. Among others, these forces of change included:

a. Interest rates; government taxation; the Crusades

b. Urbanization; the Crusades; Federal Reserve monetary policy

c. Specialization of labor, monetization; manorial estate

d. The Crusades; urbanization; itinerant merchants

A production possibilities curve indicates the:

combinations of goods and services an economy is actually producing

maximum combinations of goods and services an economy can produce given its available resources and technology

maximum combinations of goods and services an economy can produce given its unlimited resources

d. average combinations of goods and services an economy can produce given its available resources and technology

According to the law of increasing opportunity costs:

the more one is willing to pay for resources the larger will be the possible level of production

increasing the production of a particular good will cause the price of the good to rise

in order to produce additional units of a particular good, it is necessary for society to sacrifice or forego increasingly larger amounts of alternative goods

d. only by keeping production constant can rising prices be avoided

The sources of market failure include:

high interest rates, public goods, and perfect competition

externalities, public goods, and market power

low interest rates, public goods, and federal debt

d. investment spending, consumption spending, and inequity

When making comparisons of economic output growth over time, real GDP is generally a better measure than nominal GDP because:

nominal GDP may rise only because of price increases over time

real GDP is not affected by output changes

nominal GDP can't be accurately measured

real GDP is not affected by changes in productivity or the size of the labor force

a.

combinations of goods and services an economy is actually producing

b.

maximum combinations of goods and services an economy can produce given its available resources and technology

c.

maximum combinations of goods and services an economy can produce given its unlimited resources

d. average combinations of goods and services an economy can produce given its available resources and technology

According to the law of increasing opportunity costs:

a.

the more one is willing to pay for resources the larger will be the possible level of production

b.

increasing the production of a particular good will cause the price of the good to rise

c.

in order to produce additional units of a particular good, it is necessary for society to sacrifice or forego increasingly larger amounts of alternative goods

d. only by keeping production constant can rising prices be avoided

The sources of market failure include:

a.

high interest rates, public goods, and perfect competition

b.

externalities, public goods, and market power

c.

low interest rates, public goods, and federal debt

d. investment spending, consumption spending, and inequity

When making comparisons of economic output growth over time, real GDP is generally a better measure than nominal GDP because:

a.

nominal GDP may rise only because of price increases over time

b.

real GDP is not affected by output changes

c.

nominal GDP can't be accurately measured

d.

real GDP is not affected by changes in productivity or the size of the labor force

Explanation / Answer

c. c. Specialization of labor, monetization; manorial estate

b. maximum combinations of goods and services an economy can produce given its available resources and technology

c in order to produce additional units of a particular good, it is necessary for society to sacrifice or forego increasingly larger amounts of alternative goods

b. externalities, public goods, and market power

a. nominal GDP may rise only because of price increases over time

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