Refer to the Accompanying Production Possibilities Tables

question 64

Multiple Choice

Refer to the accompanying production possibilities tables. Data are in millions of units. If Germany and the United States engage in trade, the mutually beneficial terms of trade will be between

• A)3 and 4 units of autos for 1 unit of chemicals.
• B)2 and 4 units of autos for 1 unit of chemicals.
• C)2 and 4 units of chemicals for 1 unit of autos.
• D)0.33 and 0.5 units of autos for 1 unit of chemicals.

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Definitions:

Fed

Short for Federal Reserve, the central banking system of the United States, responsible for monetary policy.

Market Interest Rate

The prevailing rate at which borrowers can obtain loans and depositors can earn on their investments in the financial market, influenced by supply and demand forces.

Money Supply

The whole value of monetary assets available in an economy at a certain instance.

Price Level

A comprehensive calculation of the average price for all goods and services in the economy.