Suppose Drought Destroys Many Millions of Acres of Valuable Canadian

question 21

Multiple Choice

Suppose drought destroys many millions of acres of valuable Canadian farmland.The effect on the Canadian economy would be to move

• A)its production possibilities boundary outward.
• B)it beyond its production possibilities boundary.
• C)it along its production possibilities boundary.
• D)its production possibilities boundary inward.
• E)None of the above.There would be no change in Canada's production possibilities boundary.

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Definitions:

Long-Term Rates

Long-term rates usually refer to interest rates or bond yields on long-term debt, indicating the cost or return on investments or loans that mature over a longer period.

Interest Rate Price Risk

The risk that an investment's value will change due to a fluctuation in the absolute level of interest rates.

Corporate Bond

A debt security issued by a corporation to raise funding for capital-intensive activities, paying periodic interest.

Long-Term Bond

A bond that has a maturity period typically longer than ten years, providing the bondholder with interest payments over an extended period.