A combination of two goods which lies beyond the production possibilities curve indicates:
a. underutilization of resources
b. overutilization of resources.
c. constant opportunity costs.
d. a combination that cannot be produced with existing resources.
e. society's most preferred combination of two goods.
d
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Suppose a deposit in New York earns 6 percent a year and a deposit in London earns 4 percent a year. Interest rate parity holds if the
A) U.S. dollar appreciates by 2 percent a year. B) U.S. dollar depreciates by 2 percent a year. C) U.K. pound depreciates by 2 percent a year. D) None of the above answers is correct because interest rate parity requires that the interest rates be the same in both countries.
If the British pound appreciates from $0.50 per pound to $0.75 per pound, the U.S. dollar depreciates from ________ per dollar to ________ per dollar
A) £2; £2.5 B) £2; £1.33 C) £2; £1.5 D) £2; £1.25