A point inside the production possibilities frontier is ________ while a point outside the frontier is ________.
A. below the maximum possible; the maximum possible
B. unattainable; attainable
C. attainable; unattainable
D. the maximum possible; below the maximum possible
Answer: C
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Which of the following is TRUE of the Federal Reserve System?
a) It is controlled by the executive branch of the federal government. b) It is subject to oversight from Congress. c) It is not the central bank of the United States. d) It was established as part of the U.S. Constitution.
Sally will earn $30,000 this year and $40,000 next year. The real interest rate is 20% between this year and next year; she can borrow or lend at this rate. She has no wealth at the start of this year and plans to finish next year having consumed everything she possibly can. She would like to consume the same amount this year as next year. The inflation rate is 0%.(a)How much should Sally save this year? How much will Sally consume in each of the two years?(c)How would your answers change if the real interest rate was 40%?
What will be an ideal response?