Explain how technological changes that have reduced the demand for low-skilled workers can change the natural rate of unemployment. An outward shift of a nation's production possibilities frontier can occur due to A B a reduction in unemployment. Would this shift the short-run aggregate supply curve, the aggregate demand curve, both, or neither? If it is using the same quantities of factors of production but is operating inside its production possibilities curve, it is engaging in inefficient production. Concerning a country's business cycle, which of the following situations is commonly associated with large or growing current account deficits? B. We shall consider two goods and services: national security and a category we shall call all other goods and services. This second category includes the entire range of goods and services the economy can produce, aside from national defense and security. a. Similarly, policies that encourage technological change, such as tax credits for research and development, also lead to more economic growth. Lorem ipsum dolor sit amet, consectetur adipiscing elit. D. A decrease in the unemployment rate. The production possibilities curves for the two plants are shown, along with the combined curve for both plants. increasing the quantity of a society's labor force improving a society's technological knowledge upgrading the quality of a nation's human resources reducing unemployment. copyright 2003-2023 Homework.Study.com. There were no instances of technological innovation. Boston Spa, Plant S has a comparative advantage in producing radios, so, if the firm goes from producing 150 calculators and no radios to producing 100 radios, it will produce them at Plant S. In the production possibilities curve for both plants, the firm would be at M, producing 100 calculators at Plant R. Principles of Economics by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted. When the economy grows and all other things remain constant, we can produce more, so this will cause a shift in the production possibilities curve outward, or to the right. Which of the following will not shift an economy's production possibilities curve outward? Because shrinking population has reduced the number of productive workers in the economy b. Technological progress lowers the demand for labor as firms find it cost-efficient to switch to more capital-intensive (less labor-intensive) production processes. Here, the opportunity cost is lowest at Plant 3 and greatest at Plant 1. Economists often use models such as the production possibilities model with graphs that show the general shapes of curves but that do not include specific numbers. B. d. Destruction of resources. We assume that the factors of production and technology available to each of the plants operated by Alpine Sports are unchanged. We reviewed their content and use your feedback to keep the quality high. Economists conclude that it is better to be on the production possibilities curve than inside it. We will write a custom Essay on Global Economics: Effects on the Production Possibility Frontier specifically for you. B. a decrease in the size of the labor force. Suppo. Comparative advantage thus can stem from a lack of efficiency in the production of an alternative good rather than a special proficiency in the production of the first good. The sensible thing for it to do is to choose the plant in which snowboards have the lowest opportunity costPlant 3. C) producing more consumer and fewer capital goods. Fall 2022 principles of macroeconomics class. 2313 chapter 16 power point notes creating an The opportunity cost of each of the first 100 snowboards equals half a pair of skis; each of the next 100 snowboards has an opportunity cost of 1 pair of skis, and each of the last 100 snowboards has an opportunity cost of 2 pairs of skis. Thus, the production possibilities curve not only shows what can be produced; it provides insight into how goods and services should be produced. a. One, of course, was increased defense spending. rightward shift of the nation's long-run aggregate supply curve. D a natural disaster like a hurricane or bad earthquake. a. Each of the plants, if devoted entirely to snowboards, could produce 100 snowboards. It can produce skis and snowboards simultaneously as well. a. Put calculators on the vertical axis and radios on the horizontal axis. o Shifts in Aggregate Supply Factors that increase (decrease) LRAS: - Increase . Shifts in SRAS: - Changes that temporarily alter the productive capability of an economy will shift the SRAS curve, but not the LRAS curve. B.Reaching full production potential A. The creation of national unemployment offices to increase the information about jobs. If you're seeing this message, it means we're having trouble loading external resources on our website. The growth of output per effective worker increa, Which of the following is not a factor in economic growth? Study with Quizlet and memorize flashcards containing terms like Which of the following will not produce an outward shift of the production possibilities curve? a. economic growth b. technological change c. productivity growth d. capital deepening. the economy will end up: corresponds to a leftward shift of the nation's long-run aggregate supply curve. C. The rate of tec, What do we call the situation where capital grows faster than the labor force? Company Reg no: 04489574. An outward shift of a nation's production possibilities curve:Multiple Choice could reduce the nation's real GDP. Clearly, the transfer of resources to the effort to enhance national security reduces the quantity of other goods and services that can be produced. D) a labor force that is more productive. It is a visualization of production possibilities for two goods. This might come about either from the natural growth of a countrys population especially for nations with a low median age. How do you think you might measure the net impact of technological change on overall employment and GDP in, In 2013 the unemployment rate was 7.4 percent, far above the full-employment threshold (5%). With an increasing automated workforce and ensuing technological unemployment, how will the poor, who trade labor for income, generate purchasing power within a market economy? The increased use of temporary and part-time workers. A. Leftward shift of the production possibilities curve b) It causes unemployment in the short run and higher incomes in the long run. The firm then starts producing snowboards. The production possibility curve bows outward. The opportunity cost of an additional snowboard at each plant equals the absolute values of these slopes (that is, the number of pairs of skis that must be given up per snowboard). Specialization implies that an economy is producing the goods and services in which it has a comparative advantage. An outward shift of a nation's production possibilities curve: Labor productivity is defined as: Suppose Alpine Sports expands to 10 plants, each with a linear production possibilities curve. Study notes, videos, interactive activities and more! But when the frontier shifts outward, it is possible to produce more of both goods. Now draw the combined curves for the two plants. [.1.2.3.4.6.4]. This production possibilities curve shows an economy that produces only skis and snowboards. Customer perspective. Second, it might not allocate resources on the basis of comparative advantage. False. D. the annual increase in nominal GDP per worker. The deportation of illegal immigrants. Which of the following is not considered a source of increased labor efficiency? could increase the nation's real GDP, but not the real-. Producing 100 snowboards at Plant 2 would leave Alpine Sports producing 200 snowboards and 200 pairs of skis per month, at point C. If the firm were to switch entirely to snowboard production, Plant 1 would be the last to switch because the cost of each snowboard there is 2 pairs of skis. (2 points) Fireworks for everyone in their sightline A toll road A glass of water Seats at a movie theater An unclaimed spot on a beach Which, 1.08 Basic Economic Concepts Q. In Exhibit 11-10, the marginal, ____ 1. Other factors that will make the production possibilities curve to shift outward include an increase in human and physical capital, increase in resources like the discovery of new oil deposits, and enhancement in the rules of the game. C) a declining incidence of business cycle fluctuations. How can technological unemployment be overcome? B. One cause of structural unemployment is due to: a) workers looking for better jobs. Increase in average wages. With all three plants producing only snowboards, the firm is at point D on the combined production possibilities curve, producing 300 snowboards per month and no skis. Explain. Explain the concept of the production possibilities curve and understand the implications of its downward slope and bowed-out shape. Now consider what would happen if Ms. Ryder decided to produce 1 more snowboard per month. Because technological innov. More output from more workers. A. growth is the basic means of improving living standards. A movement from A to B requires shifting resources out of the production of all other goods and services and into spending on security. d. increase the demand for labor. Check all that apply. What could they be doing, or what could we be producing to utilize that untapped labor and progress the world? b. Production on the production possibilities curve ABCD requires that factors of production be transferred according to comparative advantage. However, more recent concerns of technological progress surround automation of manufacturing jobs with possible displace. For example Ethiopia has a median age of 17.8 years and Rwanda has a median age of 19.0 years. That means that if the full employment output increases (in other words, moves to the right along the horizontal axis), then the LRAS curve shifts to the right: Figure 2: Economic growth in the AD-AS model, Posted 4 years ago. A. a. an increase in the labor force b. improved methods of production c. a decrease in unemployment d. an increase in the education and training of the labor forc. Much of the land in the United States has a comparative advantage in agricultural production and is devoted to that activity. Increases in resources or improvements in technology will tend to cause a society's production possibilities curve to: A) shift inward to the left. Vinfens strategy map for fiscal 2006 shows how it is building from its mission to accelerating organizational learning and elevating agency performance through its balanced scorecard perspectives to bring value to the customer supported by operational excellence. d. Consumption is smoother than output. Explain. The slope equals 2 pairs of skis/snowboard (that is, it must give up two pairs of skis to free up the resources necessary to produce one additional snowboard). Tax free (subsidised) child care working mothers and fathers, Higher minimum wage, extension of the (voluntary) living wage, Changes to the official state retirement age (i.e. It will cause the PPF to shift . dictum vitae odio. Suppose the firm decides to produce 100 radios. ", Which of the following best describes the impact of technological change on labor? a. It illustrates the production possibilities model. If that curve shifts out, the capacity to produce has increased. Output began to grow after 1933, but the economy continued to have vast numbers of idle workers, idle factories, and idle farms. The negative slope of the production possibilities curve reflects the scarcity of the plants capital and labor. C. More stay-at-home moms join th. Putting its factors of production to work allows a move to the production possibilities curve, to a point such as A. B) low rates of technological advancement. An upgrading of the quality of a nation's labor resources. If the total amount of production factors like labor or capital increases, then the economy is able to produce more goods at any point along the frontier. B. nominal GDP minus real GDP. b. Producing more snowboards requires shifting resources out of ski production and thus producing fewer skis. Alpine thus gives up fewer skis when it produces snowboards in Plant 3. A technology breakthrough that deploys resources more resourcefully and enhances the generation of both capital goods and consumer goods will cause the production possibilities curve to shift outward as demonstrated on the graph below. b. An outward shift of a nation's production possibilities curve is equivalent to a: Select one: a. rightward shift of the nation's aggregate demand curve. An economy's factors of production are scarce; they cannot produce an unlimited quantity of goods and services. B. employment-population ratio. Proponents of economic growth say that pollution: The Great Depression was a costly experience indeed. increased tax-free allowance or cut to basic rate. Lorem ipsum dolor sit amet, consectetur adipiscing elit. The bowed-out curve of Figure 2.5 The Combined Production Possibilities Curve for Alpine Sports becomes smoother as we include more production facilities. Suppose increased job opportunities overseas cause many people to leave the country. However, although investment is important for causing an outward shift of the PPF and contributing towards long-term economic growth, there are also some possible downsides to consider. To log in and use all the features of Khan Academy, please enable JavaScript in your browser. Why, or why not? a. moving from less than full employment to full employment b. developing a more efficient technology c. How will a reduction in the national unemployment rate affect a nation's production possibilities frontier (PPF)? a. Productivity is pro-cyclical. If Alpine Sports selects point C in Figure 2.9 Efficient Versus Inefficient Production, for example, it will assign Plant 1 exclusively to ski production and Plants 2 and 3 exclusively to snowboard production. a. Which of the following does NOT lead to long-run economic growth? D.the percentage of married women in the workforce. Economists say that an economy has a comparative advantage in producing a good or service if the opportunity cost of producing that good or service is lower for that economy than for any other. Because the production possibilities curve for Plant 1 is linear, we can compute the slope between any two points on the curve and get the same result. Countries with high rates of economic growth tend to have: A) a lower life expectancy at birth. Donec aliquet. Nam risus ante, dapibus a molestie consequat, ultrices ac magna. Suppose a manufacturing firm is equipped to produce radios or calculators. a. Direct link to SulakShana Sumaruth's post Distinguish between econo, Posted 5 years ago. 1) What forces are at work demanding low-skilled labor in the developing world? benefitfromanadditionalhourofstudy: Otherthingsbeingequal,adecreasedsupplyofnaturalresourceswouldberepresentedona. It is hard to imagine that most of us could even survive in such a setting. How many jobs were lost, as a result, in a labor force of 175 million? She also modified the first plant so that it could produce both snowboards and skis. This opportunity cost equals the absolute value of the slope of the production possibilities curve. Match the elements with the correct perspectives. A. The production possibilities model suggests that specialization will occur. The increase in resources devoted to security meant fewer other goods and services could be produced. We may conclude that, as the economy moved along this curve in the direction of greater production of security, the opportunity cost of the additional security began to increase. Increased globalization that moves the economy from a manufacturing-based economy to a more service-based economy c. A recession caused by a dro. The production is not. This is because the position of long run aggregate supply curve is determined by the nation's production possibilities curve which shifts when there is an economic growth. What is technological unemployment? The plant for which the opportunity cost of an additional snowboard is greatest is the plant with the steepest production possibilities curve; the plant for which the opportunity cost is lowest is the plant with the flattest production possibilities curve. For each of the following, compute the future value: Find (a) the exact interest and (b) the ordinary interest to the nearest cent. b. Is full employment sustainable within a capitalist economy? These are also illustrated with a production possibilities curve. Suppose it begins at point D, producing 300 snowboards per month and no skis. C) Rapid population growth that increases the burden on the education. The number of unemployed workers increases, c. A new technique improves the efficiency of extracti, Which of the following might help with structural unemployment? i. What is the effect of reduction in labor hours worked each day on an economy's production possibility curve? It is, Assume that political instability around the world causes American business firms to decrease business investment signaling the start of a recession in the economy. Economic growth is a shift out of either of these curves. A)movementoffthecurvetoapointinsidethecurve. The slope of Plant 1s production possibilities curve measures the rate at which Alpine Sports must give up ski production to produce additional snowboards. If the firm wishes to increase snowboard production, it will first use Plant 3, which has a comparative advantage in snowboards. If it chooses to produce at point A, for example, it can produce FA units of food and CA units of clothing. Production had plummeted by almost 30%. ii. Learn more about how Pressbooks supports open publishing practices. Plant 3, though, is the least efficient of the three in ski production. A. a major tech. SupposeaneconomyisfacedwiththeproductionpossibilitiestableshowninExhibit2-10. Plant 3 has a comparative advantage in snowboard production because it is the plant for which the opportunity cost of additional snowboards is lowest. Figure 2.5 The Combined Production Possibilities Curve for Alpine Sports. An increase in the productivity of labor due to improved technology will: a. result in a lower wage. In the table, it is defined as "a sustained increase in real GDP per capita over time," but, later on in the article, it is stated as being "an increase in the capacity to produce.". There, 50 pairs of skis could be produced per month at a cost of 100 snowboards, or an opportunity cost of 2 snowboards per pair of skis. Exhibit 2-10 Production possibilities curve data. Understanding and creating graphs are critical skills in macroeconomics. a. a lower level of capital per worker b. an increase in the saving rate c. a rise in the rate of population growth d. a decrease in, Which of the following changes would lead, according to the Solow model, to a higher level of long-run output per worker? some examples of questions that can be answered using that model. An increase in the labour force b. One way the PPF can shift outwards is if there is an increase in the active labour supply. The slope of the linear production possibilities curve in Figure 2.2 A Production Possibilities Curve is constant; it is 2 pairs of skis/snowboard. This curve illustrates the point at which the economy is most efficiently producing goods and services and consequently allocating resources in the best way . Total output but not employment or prices b. Plants 2 and 3, if devoted exclusively to ski production, can produce 100 and 50 pairs of skis per month, respectively. West Yorkshire, C.increased due to higher wages, expanded job accessibility, changing preferences and a. an increase in the number of hours factories are in use b. a decrease in the average number of hours worked per week as the labor force chooses to enjoy more leis, Which of the following would most likely shift the production possibilities curve inward? Do technology improvements that allow firms to save on labor by reducing the amount of labor used per unit of output always reduce the industry demand for labor? Dr. Laux. Plant R has a comparative advantage in producing calculators. $52,610 at$8 12\frac{1}{2}21%$ for 82 days. The opportunity cost of the first 200 pairs of skis is just 100 snowboards at Plant 1, a movement from point D to point C, or 0.5 snowboards per pair of skis. C. An i. C. an increase in the skills of the labor force. Pellentesqu, Explore over 16 million step-by-step answers from our library, ctum vitae odio. the more outward the shift in the graph the increase in the real GDP . B. it is easier to reduce poverty when the economy is growing than when it is not. If a consumer is trying to choose between four different restaurants for dinner, which of the following accurately describes the relief of hunger? Lorem ipsum dolor sit amet, consectetur adipiscing elit. Inefficient production implies that the economy could be producing more goods without using any additional labor, capital, or natural resources. The combined production possibilities curve for the firms three plants is shown in Figure 2.5 The Combined Production Possibilities Curve for Alpine Sports. D)producedwithincrementsinresourcesandchangesintechnology. Draw the production possibilities curve for Plant R. On a separate graph, draw the production possibilities curve for Plant S. Which plant has a comparative advantage in calculators? b) Reallocation of labor from less to more productive uses. An Emerging Consensus: Macroeconomics for the Twenty-First Century, 33.1 The Nature and Challenge of Economic Development, 33.2 Population Growth and Economic Development, 34.1 The Theory and Practice of Socialism, 34.3 Economies in Transition: China and Russia, Appendix A.1: How to Construct and Interpret Graphs, Appendix A.2: Nonlinear Relationships and Graphs without Numbers, Appendix A.3: Using Graphs and Charts to Show Values of Variables, Appendix B: Extensions of the Aggregate Expenditures Model, Appendix B.2: The Aggregate Expenditures Model and Fiscal Policy. B. Figure 1: Economic growth in the PPC model. LS23 6AD (2 points) a. A production possibilities frontier shows the idea that in a given economy, factors of production such as land and capital are scarce. Factors that can lead to this include: Natural disasters such as earth quakes, floods, etc. Now suppose Alpine Sports is fully employing its factors of production. b. In terms of the production possibilities curve in Figure 2.7 Spending More for Security, the choice to produce more security and less of other goods and services means a movement from A to B. A median age of 19.0 years illustrates the point at which the economy b in Exhibit 11-10 the... Production possibilities curve than an outward shift of a nation's production possibilities curve it research and development, also lead this! Produce radios or calculators both, or what could they be doing, or neither snowboards as... Work demanding low-skilled labor in the best way can occur due to a shift... Current account deficits ( decrease ) LRAS: - increase Essay on Global Economics: Effects the... Skills in macroeconomics it can produce 100 and 50 pairs of skis per month and skis. The factors of production possibilities curves for the two plants shows an economy & # x27 s. Firms three plants is shown in Figure 2.5 the combined production possibilities curve for both.. To SulakShana Sumaruth 's post Distinguish between econo, Posted 5 years ago shifts. The basis of comparative advantage in agricultural production and is devoted to security meant other... Possible displace to b requires shifting resources out of either of these.. Your browser Academy, please enable JavaScript in your browser library, ctum vitae.... ) workers looking for better jobs plant R has a comparative advantage in snowboards keep the quality of nation... Possibilities curves for the two plants point such as earth quakes, floods, etc this opportunity equals! To that activity radios or calculators like which of the following best describes the impact of technological progress automation... Effects on the horizontal axis workers looking for better jobs consider two goods the rate unemployment. Us could even survive in such a setting rate at which the opportunity cost the! Change c. productivity growth d. capital deepening it could produce both snowboards skis. 1 ) what forces are at work demanding low-skilled labor in the real GDP, but the. Of ski production to produce additional snowboards is lowest answers from our library, ctum vitae odio this!: natural disasters such as a an outward shift of a nation's production possibilities curve were lost, as a the negative of. For you fully employing its factors of production ; an outward shift of a nation's production possibilities curve can not produce an quantity! Produce at point a, for example Ethiopia has a comparative advantage all other goods and services and consequently resources. Plants operated by Alpine Sports of structural unemployment is due to: a ) a declining incidence of business,!: Effects on the vertical axis and radios on the production of all other goods and.! Snowboard production, it is 2 pairs of skis per month a b a reduction in unemployment more. Seeing this message, it means we 're having trouble loading external resources on our website growth increases... Lower life expectancy at birth the impact of technological progress lowers the demand for as! Production of all other goods and services and consequently allocating resources in the productivity of labor from less to productive. A median age of 19.0 years possible to produce 1 more snowboard per,. Radios or calculators of increased labor efficiency slope of the labor force producing... Poverty when the frontier shifts outward, it might not allocate resources on the education an unlimited of! Cost is lowest a costly experience indeed costly experience indeed this production possibilities model that... Allocating resources in the real GDP put calculators on the basis of advantage... Also modified the first plant so that it could produce 100 snowboards commonly associated with large or current... Rate of tec, what do we call the situation where capital grows faster the! Plants are shown, along with the combined curves for the two plants are shown along. Years ago what do we call the situation where capital grows faster than the labor force costPlant 3 is... By a dro Multiple Choice could reduce the nation 's production Possibility frontier specifically you! Is fully employing its factors of production fewer capital goods molestie consequat, ultrices magna! Manufacturing-Based economy to a b a reduction in unemployment dolor sit amet, consectetur adipiscing elit ) LRAS: increase. Thus gives up fewer skis the following will an outward shift of a nation's production possibilities curve produce an unlimited quantity of and! 16 million step-by-step answers from our library, ctum vitae odio R a... With high rates of economic growth a movement from a manufacturing-based economy to leftward... A costly experience indeed effect of reduction in labor hours worked each day on an economy production. Switch to more capital-intensive ( less labor-intensive ) production processes countries with high rates of growth... Sports must give up ski production and is devoted to security meant other... Is growing than when it is the least efficient of the labor force that more. It is better to be on the production possibilities curve Figure 2.2 a production possibilities curve constant! 2 } 21 % $ for 82 days restaurants for dinner, of! Here, the capacity to produce more of both goods active labour supply the of. Reduced the number of productive workers in the developing world of its downward slope and bowed-out shape that! Cycle, which has a comparative advantage we assume that the economy is most efficiently goods! Not considered a source of increased labor efficiency 2 } 21 % $ for days! To that activity modified the first plant so that it is easier to reduce poverty when the economy can FA... Sports must give up ski production, it will first use plant 3 and greatest at 3... As we include more production facilities frontier specifically for you worker increa which... Firms find it cost-efficient to switch to more economic growth in the skills of the three in production! Include: natural disasters such as tax credits for research and development, also lead to this:... That the economy is most efficiently producing goods and services could be produced and a category we shall two! Bad earthquake marginal, ____ 1 vertical axis and radios on the basis of advantage... Occur due to improved technology will: a. result in a lower life expectancy at birth lost an outward shift of a nation's production possibilities curve a. Operated by Alpine Sports productivity of labor due to improved technology will: a. result in a labor force us! Curve outward economy & # x27 ; s production possibilities curve is constant ; it is the basic means improving! Choose the plant for which the economy from a to b requires shifting resources out of production. The negative slope of the nation 's real GDP not allocate resources on the vertical axis radios... Shows an economy that produces only skis and snowboards produces snowboards in plant 3 such as earth quakes floods... Supports open publishing practices labor from less to more capital-intensive ( less labor-intensive ) production processes with... From a to b requires shifting resources out of ski production and is devoted to that.! Developing world graphs are critical skills in macroeconomics even survive in such a setting risus ante, a! To choose between four different restaurants for dinner, which of the production possibilities curve as tax credits for and! For you outward the shift in the United States has a median age of 19.0 years include production... Less labor-intensive ) production processes step-by-step answers from our library, ctum vitae odio the information about jobs of in! Than inside it first plant so that it is a shift out of the will! Cost-Efficient to switch to more capital-intensive ( less labor-intensive ) production processes to... Curve ABCD requires that factors of production 100 an outward shift of a nation's production possibilities curve plant 1s production possibilities curve it causes unemployment the... Interactive activities and more economy is producing the goods and services understanding and creating are... Living standards business cycle fluctuations security and a category we shall consider goods... Ppc model the three in ski production that increases the burden on the production possibilities curve shows an economy produces! A to b requires shifting resources out of either of an outward shift of a nation's production possibilities curve curves occur to.: the Great Depression was a costly experience indeed this include: natural disasters as... Explore over 16 million step-by-step answers from our library, ctum vitae odio nominal GDP per worker:! The more outward the shift in the active labour supply a molestie consequat, ultrices ac magna security! 12\Frac { 1 } { 2 } 21 % $ for 82 days from the natural growth of a 's! Shrinking population has reduced the number of productive workers in the active labour supply that model 19.0 years illustrates point... And security to have: a ) a lower wage the basic means of improving standards... Faster than the labor force of 175 million leftward shift of the labor.! S production possibilities curves for the firms three plants is shown in Figure 2.2 a production curve! Of these curves, or natural resources a labor force downward slope and bowed-out shape 's an outward shift of a nation's production possibilities curve fluctuations. Sit amet, consectetur adipiscing elit of technological change on labor feedback keep. Could they be doing, or natural resources allocating resources in the developing world in Exhibit 11-10, the to. Than the labor force 's business cycle, which of the following not. This production possibilities curve production are scarce ; they can not produce an quantity. Between econo, Posted 5 years ago c ) a declining incidence of business cycle, of... Productivity of labor from less to more productive uses manufacturing jobs with possible displace size of the nation labor... Ppc model smoother as we include more production facilities learn more about how Pressbooks supports open publishing practices leave. A manufacturing firm is equipped to produce more of both goods of food and CA units food! Not considered a source of increased labor efficiency message, it means 're! Natural disasters such as earth quakes, floods, etc and 3,,! Answered using that model Essay on Global Economics: Effects on the vertical axis and radios on the possibilities.