measures how optimistic or pessimistic people are about the future health of the economy and how they will fair in the future.

Which of the following best describes the economic effect that results when the government increases interest rates and restricts the lending of money? a. borrowing money becomes more expensive and there is less investment in production. b. the economy grows as investments result in larger profits. c. government spending drives up prices because of greater competition for goods and services. d. consumers save more money and spend less buying goods and services.

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What would not cause duff beer’s production possibilities curve to expand in the short run? a. improved manufacturing technology b. additional resources c. increased demand