Use the Following to Answer Question(s): Production Possibilities in Alphaland

question 169

Multiple Choice

Use the following to answer question(s) : Production Possibilities in Alphaland and Omegaland

-(Exhibit: Production Possibilities in Alphaland and Omegaland) Which of the following statements is true?

• A) Because of trading, all people in Omegaland will benefit in the short run.
• B) Because of trading, all people in Alphaland will benefit in the short run.
• C) The final terms of trade could be 4/5 computer for 1 car.
• D) The final terms of trade could be 3 computers per car.

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Definitions:

Coupon Rate

The yearly interest yield on a bond, shown as a percentage of its nominal value, disbursed from the date of issuance to the date it matures.

Present Value

A calculation that determines the current value of an amount of money to be received in the future, discounted at a specific interest rate.

Yield To Maturity

Yield to maturity is the total return expected on a bond if the bond is held until it matures, including all interest payments and the repayment of par value.

Annual Coupon

A fixed interest rate paid by a bond issuer to the bondholder, typically paid annually.