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Chapter 2: Q 12 (page 46)

Senator Borman interjects the following comment after the statements by Senators Creighton and Long reported in Problems 2-10 and 2-11: “In fact, both of my esteemed colleagues are wrong, because an unacceptably large portion of our nation’s resources is currently unemployed.” Of the labeled points on the diagram, which one is consistent with Senator Borman’s position?

Short Answer

Expert verified

Point A is consistent with Senator Borman's position.

Step by step solution

01

Step 1. Given Information.

The graph for the capital goods and the consumer goods is,

02

Step 2. The correct point.

Point A is consistent with Senator Borman's position because according to him there is unemployment and the economy is working inside the PPF curve.

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Most popular questions from this chapter

Country A and country B produce the same consumption goods and capital goods and currently have identical production possibilities curves. They also have the same resources at present, and they have access to the same technology.

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