"If a certain combination of goods or services lies outside the production possibilities curve of an economy, which of the following is true? (A) Effective trade barriers have reduced foreign imports into the economy. (B) New technology is being used in production. (C) Resources are not available to achieve that combination of goods or services. (D) Resources are not being used efficiently to achieve that combination of goods or services. (E) Resources are being used at a more rapid rate than they were in the past. 2. Which of the following groups would most likely gain from unanticipated inflation? (A) Landlords who own apartments in cities with rent controls (B) Individuals who have fixed retirement incomes (C) Individuals who earn high incomes (D) Individuals who have borrowed money at fixed interest rates (E) Banks that have loaned all excess reserves at a fixed interest rate"

The production possibility curve (PPC) is a curve that shows the various combinations of the amounts of two goods that can be produced within an economy with given resources and technology. Production points inside the curve illustrates an economy that is not producing at its comparative advantage while production outside the curve is not possible because more of both goods can't be produced given the fixed resources.

Inflation is the increase in the general price of goods and services. When there is an inflation, the individuals who have borrowed money at fixed interest rates will gain more because the money had more value as at the time they borrowed.