If the maximum potential combination of consumer and capital goods produced by an economy has increased over time, which of the following is true? a. Marginal tax rates have increased due to contradictory fiscal policy. b. Keynesian policy initiatives have allowed for increased consumption of both consumer and capital goods. c. New physical capital has been introduced to firms throughout the economy. d. Resources are being utilized inefficiently at this combination of goods and services. e. Monetary policy authorities have effectively decreased bank reserves through open market operations.

If the maximum potential combination of consumer and capital goods produced by an economy has increased over time, which of the following is true? a. Marginal tax rates have increased due to contradictory fiscal policy. b. Keynesian policy initiatives have allowed for increased consumption of both consumer and capital goods. c. New physical capital has been introduced to firms throughout the economy. d. Resources are being utilized inefficiently at this combination of goods and services. e. Monetary policy authorities have effectively decreased bank reserves through open market operations.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter1: Introducing The Economic Way Of Thinking

Section: Chapter Questions

Problem 2SQ

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Question

If the maximum potential combination of consumer and capital goods produced by an economy has increased over time, which of the following is true?

a. Marginal tax rates have increased due to contradictory fiscal policy.

b. Keynesian policy initiatives have allowed for increased consumption of both consumer and capital goods.

c. New physical capital has been introduced to firms throughout the economy.

d. Resources are being utilized inefficiently at this combination of goods and services.

e. Monetary policy authorities have effectively decreased bank reserves through open market operations.

Definition Definition Policy implemented by the central bank of a country (such as the Federal Reserve in the United States) to achieve certain macroeconomic objectives. Monetary policy is a supply-side macroeconomic policy that supervises the growth rate and money supply in the economy.

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