A firm's opportunity cost of using resources provided by the firm's owners is called

The higher the expected rate of inflation,

A) the lower is the nominal rate of interest. B) the higher is the real rate of interest. C) the higher is the nominal rate of interest. D) the higher the real and nominal rates of interest.

Compare two economies A and B that start out with identical production possibilities curves. Economy A chooses an efficient point with 6 consumption goods and 3 capital goods, while economy B also chooses an efficient point, but with 4 consumption goods and 5 capital goods. In the future we can predict:

a. economy A will operate inefficiently. b. economy B will operate inefficiently. c. economy A and economy B will grow equally fast. d. economy A will grow faster than economy B. e. economy B will grow faster than economy A.