If he devotes all of his available resources to cantaloupe production, a farmer can produce 120 cantaloupes. If he sacrifices 1.5 watermelons for each cantaloupe that he produces, it follows that
a. if he devotes all of his available resources to watermelon production, then he can produce 80 watermelons.
b. he cannot have a comparative advantage over other farmers in producing cantaloupes.
c. his opportunity cost of one watermelon is 2/3 of a cantaloupe.
d. his production possibilities frontier is bowed-out.
c
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Suppose it takes roughly two years for monetary policy to have a significant impact on inflation
If inflation is currently low but policymakers believe inflation will rise over the next two years with an unchanged stance of monetary policy, when should they tighten monetary policy to prevent the inflationary surge? A) now B) wait until overt signs of inflation appear C) next year D) two years later
A leading countercyclical variable ________
A) reaches a peak before the peak of the business cycle B) reaches a trough before the peak of the business cycle C) reaches a trough along with the trough of a business cycle D) all of the above E) none of the above