If opportunity costs are constant, the production possibilities frontier would be graphed as

The rational expectations hypothesis suggests that

A) people are creatures of habit and tend not to change their economic behavior in the short run. B) people are rational if they make forecasts about economic activity. C) people use all available information to make forecasts about future economic activity and adjust their behavior to these forecasts. D) people use all available information to make forecasts about future economic activity but often fail to adjust their behavior to these forecasts.

Which of the following does not occur in resolving a debt crisis?

A) Debts are restructured B) Repayment periods are shortened C) Interest rates are reduced D) Some partial debt forgiveness