The ________ to produce any given level of output is indicated by the point of tangency between an isocost line and the isoquant corresponding to that level of output.

Suppose that at some point the spot exchange rate is equal to 100 yen per one U.S. dollar, while the interest rate in dollars is 6% and the interest rate in yen is 1%. What is the approximate forward rate that is consistent with this situation?

A) 95.3 yen per dollar B) 105 yen per dollar C) 107 yen per dollar D) 92 yen per dollar

Which group is hurt by inflation being less than expected?

A) holders of TIPS B) lenders of fixed-rate mortgages C) borrowers with fixed-rate mortgages D) all of the above