Which of the Following Factors Can Influence the Production Possibilities

question 46

Multiple Choice

Which of the following factors can influence the production possibilities frontier in the future?

• A)The amount of capital produced
• B)A fall in the rate of inflation
• C)A decrease in consumption in an economy
• D)An increase in the tax rate
• E)A legal reform that increases transaction costs

---

Definitions:

Cash Equivalent

Short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value.

Maturity

Maturity is the time at which a financial instrument, such as a bond or loan, reaches its due date and must be repaid or redeemed.

Term to Maturity

The remaining time until a financial instrument's principal amount is due to be repaid.

Net Basis

A method of reporting income and expenses where they are netted against each other, showing only the net amount instead of reporting them separately.