A society can produce two goods: donuts and beer. The society's production possibility frontier is negatively sloped and "bowed outward" from the origin. As this society moves up its production possibility frontier, producing more and more units of donuts, the opportunity cost of producing beer

A reason why many of the third world countries are not achieving an increase in their standard of living is that they

A) don't have a strong central government. B) don't have strong military power to force people to work harder. C) don't have social institutions with a strong rule of law and economic freedom. D) strongly encouraged international trade. E) don't have enough natural resources.

When the economy is in the liquidity trap, the

A) LM curve is horizontal. B) LM curve is vertical. C) IS curve is horizontal. D) IS curve is vertical.