Exhibit 2-3 Production Possibilities Curve Data According to the Data Given in Exhibit 2-3, the Production

question 17

Multiple Choice

Exhibit 2-3 Production possibilities curve data $$\begin{array} { | l | r | r | r | r | r | } \hline & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } \\\hline \text { Capital goods } & 0 & 1 & 2 & 3 & 4 \\\text { Consumer goods } & 20 & 18 & 14 & 8 & 0 \\\hline\end{array}$$ According to the data given in Exhibit 2-3, the production of 1 unit of capital goods and 20 units of consumer goods:

• A) is possible but would be inefficient.
• B) may be a result of unemployment.
• C) may be a result of unused natural resources.
• D) is not feasible with current resources and technology.

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Definitions:

Returns

The profit or loss generated on an investment over a particular period, typically expressed as a percentage of the investment's initial cost.

Annual Coupon Bond

A bond that pays interest to the holder annually until its maturity, at which point the principal is repaid.

Real Rate

The interest rate that has been adjusted for inflation, reflecting the true cost of borrowing or real yield on an investment.

Inflation

The rate at which the comprehensive cost of goods and services inflates, sapping the buying power.