-The Figure Above Shows the Production Possibilities Frontier for a Country.If

question 41

Multiple Choice

-The figure above shows the production possibilities frontier for a country.If the economy is operating at point B,then the opportunity cost of another million gallons of milk is

• A) 4 gallons of ice cream for a gallon of milk.
• B) 3 gallons of ice cream for a gallon of milk.
• C) 1 gallon of ice cream for a gallon of milk.
• D) 1/3 of a gallon of ice cream for a gallon of milk.
• E) zero because after producing another million gallons of milk then zero gallons of ice cream are produced.

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Definitions:

Yield To Maturity

An estimate of the annualized rate of return of a bond if held until the date it matures, accounting for its current market price, face value, interest payments, and time to maturity.

Coupon Rate

The yearly interest yield of a bond, represented as a percentage of its nominal value, disbursed from the time it's issued up until its due date.

Maturity Value

The amount of money an investment will yield upon the expiration of an investment period.

Interest Rates

The cost of borrowing money or the payment received for deposit funds, typically expressed as a percentage rate over the period of one year.