Tackle the Test: Multiple-Choice Questions

1. Question

   Which of the following will shift the production possibilities curve outward?

   
   

   
   

   1. an increase in the production of investment goods

      
      
   
   

   2. an increase in the production of consumer goods

      
      
   
   

   3. technological progress

      
      
   
   

   A.

   I only

   B.

   II only

   C.

   III only

   D.

   I and III only

   E.

   I, II, and III

   Which of the following will shift the production possibilities curve outward?

2. Question

   In the production possibilities curve model, long-run economic growth is shown by a(n)

   A.

   outward shift of the PPC.

   B.

   inward shift of the PPC.

   C.

   movement from a point below the PPC to a point on the PPC.

   D.

   movement from a point on the PPC to a point below the PPC.

   E.

   movement from a point on the PPC to a point beyond the PPC.

   In the production possibilities curve model, lon
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   Question

   The reduction in the value of an asset due to wear and tear is known as

   A.

   depreciation.

   B.

   negative investment.

   C.

   economic decline.

   D.

   disinvestment.

   E.

   net investment.

   The reduction in the value of an asset due to wear and tear is known as

4. Question

   In the aggregate demand–aggregate supply model, long-run economic growth is shown by a

   A.

   leftward shift of the aggregate demand curve.

   B.

   rightward shift of the aggregate demand curve.

   C.

   rightward shift of the long-run aggregate supply curve.

   D.

   rightward shift of the short-run aggregate supply curve.

   E.

   leftward shift of the short-run aggregate supply curve.

   In the aggregate deman

5. Question

   Which of the following is listed among the key sources of growth in potential output?

   A.

   expansionary fiscal policy

   B.

   expansionary monetary policy

   C.

   a rightward shift of the short-run aggregate supply curve

   D.

   investment in human capital

   E.

   both a and b

   Which of the following is listed among the key sources of growth in potential output?