In Constructing a Production Possibilities Curve, All of the Following

question 209

Multiple Choice

In constructing a production possibilities curve, all of the following are assumed EXCEPT

• A) resources are fully employed.
• B) the quantity and quality of resources being used is fixed.
• C) the state of technology is improving.
• D) the time period involved is fixed.

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Definitions:

Mortgage Bonds

Bonds secured by a mortgage on a property, providing bondholders a claim against the property in case of default.

Debentures

A type of debt instrument that is not secured by physical assets or collateral but backed only by the general creditworthiness and reputation of the issuer.

Interest Expense

The cost incurred by an entity for borrowed funds, often quoted as an annual rate, and is typically deductible for tax purposes.

Sinking Fund

A reserve fund established by a company to repay debt or replace a preferred stock at a future date through periodic payments.