The Following Graph Is the Production Possibilities Curve of a Nation

question 199

Multiple Choice

The following graph is the production possibilities curve of a nation: Refer to the above graph. Which of the following combinations would be unattainable?

• A) 8 drill presses and 1 bread
• B) 7 drill presses and 2 bread
• C) 10 drill presses and 4 bread
• D) 2 drill presses and 3 bread

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Definitions:

Required Reserves

The minimum amount of reserves a bank needs to hold as mandated by central banks to ensure financial stability and liquidity.

Demand Deposits

Demand Deposits are bank account funds that can be withdrawn at any time without any advance notice to the bank.

Original Maturity

The initial fixed period for which a financial instrument, such as a bond or loan, is issued before it is due for repayment.

Required Reserves

The least amount of money that a bank is required to keep on hand as a safeguard for deposits, in compliance with the rules set by central bank authorities.