Which of the following would cause an economy to produce at a point inside its production possibilities curve?

A federal surplus is deflationary when all else is held constant

Indicate whether the statement is true or false

When an asset is described as being highly liquid, which one of the following characteristics does it possess?

A) It earns a high rate of interest, so its purchasing power is maintained when prices rise. B) It is easily and readily converted into money without any loss in purchasing power. C) The face value of the asset is somewhat less than its value when converted into currency. D) The asset holds its value over time.