1.Which of the following will cause the production possibilities frontier to shi
ID: 2441662 • Letter: 1
Question
1.Which of the following will cause the production possibilities frontier to shift outward? An increase in aggregate demand. An increase in transfer payments. A decrease in long-run aggregate supply. An increase in worker productivity. An increase in government spending. 2.If Congress removes all tariffs on Chinese products in response to a new free trade agreement with China, then imports will decrease. aggregate supply will shift left. aggregate demand will shift left. resources will be used more efficiently. fewer Chinese goods and services will be sold. 3.Higher prices in the Macro Islands will increase the number of Macro Island products purchased by tourists. make the international value of the dollar appreciate. make Macro Island exports less expensive for foreigners to buy. cause the international value of the Macro dollar to rise. cause the international value of the Macro dollar to fall. 1.Which of the following will cause the production possibilities frontier to shift outward? An increase in aggregate demand. An increase in transfer payments. A decrease in long-run aggregate supply. An increase in worker productivity. An increase in government spending.Explanation / Answer
Increase in the productivity of worker will shift the production possibility curve out words because it will increase the long-run potential output of the economy. A production possibility Frontier is drawn for fixed resources and available Technology. However increased productivity is similar to increased resources because the resources are now used more judiciously and efficiently. Select 4th option.
Aggregate demand will shift towards the left when imports are free from any tariff because imports reduce the aggregate spending as they are a part of net exports and are deducted from GDP. Select third option
It will reduce the international value of macro dollar because now only fewre goods can be purchased. Select the last option.
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