Which of the following interest rates will be least affected by a shift in monetary policy that alters the money supply?

A temporary supply shock that raises prices

A) will cause the real interest rate to rise in the long run. B) has no long-run impact on inflation and output. C) causes output to fall in the long run. D) causes inflation to rise in the long run.

Suppose that the opportunity cost of producing a rocking chair in Mexico is 50 basketballs and the opportunity cost of a rocking chair in Japan is 80 basketballs. Japan and Mexico can realize mutual gains if the terms of trade are

a. greater than 80 basketballs per rocking chair, and Japan produces rocking chairs b. between 50 and 80 basketballs per rocking chair, and Japan produces basketballs c. greater than 80 basketballs per rocking chair, and Mexico produces basketballs d. less than 50 basketballs per rocking chair, and Japan produces basketballs e. between 50 and 80 basketballs per rocking chair, and Japan produces rocking chairs