Question

1. An improvement in technology

   	a.	will always result in a parallel shift of the production possibilities frontier
   	b	will never result in a parallel shift of the production possibilities frontier
   	c	will be indicated as a movement along the production possibilities frontier
   	d	will shift the production possibilities frontier outward but not necessarily to a parallel position
   	e	may not shift the production possibilities frontier

(2) Economic fluctuations

	a	are linked, but not perfectly synchronized, across countries
	b	are perfectly synchronized across countries
	c	in one country are independent of fluctuations in other countries
	d	in the United States always lag behind fluctuations in other developed economies
	e	in the United States usually occur before fluctuations in other developed economies

3) "Efficiency" refers to

a		producing output using the least amount of labor
b		producing output using the least amount of capital
c		producing as far inside the production possibilities frontier as possible
d		producing only one out of many possible commodities
e		getting the maximum possible output from available resources

4) An increase in the price level will cause

a		an increase in the quantity of aggregate output supplied
b		a decrease in the quantity of aggregate output supplied
c		a leftward shift of the aggregate supply curve
d		a rightward shift of the aggregate supply curve
e		a leftward or rightward shift of the aggregate supply curve, depending on the reason for the price change

Answer 1

Answer Option A) will always result in a parallel shift of the production possibilities frontier

An improvement in technology will always result in a parallel shift of the production possibilities frontier

Improvement in technology can shift the production possibility curve upward. The reason is that improvement in technology improves the productivity.

Answer Option A) are linked, but not perfectly synchronized, across countries

Economic fluctuations are linked, but not perfectly synchronized, across countries

Answer Option E) getting the maximum possible output from available resources.

"Efficiency" refers to getting the maximum possible output from available resources.

Answer Option A) an increase in the quantity of aggregate output supplied

An increase in the price level will cause an increase in the quantity of aggregate output supplied. The reason is that due to increase in price, profits earn by the firms will earn and they will increase the quantity of aggregate output supplied.