Use the Figure Below to Answer the Following Questions

question 156

Multiple Choice

Use the figure below to answer the following questions.

Figure 2.1.3
-Figure 2.1.3 illustrates Mary's production possibilities frontier. If Mary wants to move from point B to point C,

• A)it will be necessary to improve technology.
• B)it will be necessary to increase the accumulation of capital.
• C)it will be necessary to give up some of good X to obtain more of good Y.
• D)it will be necessary to give up some of good Y to obtain more of good X.
• E)she can accomplish this without any opportunity cost.

---

Definitions:

Fixed-rate

Refers to an interest rate that remains constant over the duration of the loan, bond, mortgage, or other financial instrument.

Sub-prime Mortgages

Loans offered to individuals with poorer credit histories or a higher risk of defaulting, usually at higher interest rates.

Fannie Mae

A government-sponsored enterprise (GSE) focused on expanding the secondary mortgage market by securitizing mortgages, enhancing liquidity in the financial system.

Freddie Mac

A public government-sponsored enterprise aimed at expanding the secondary mortgage market by buying loans from lenders.