questions:

2. A production possibiities curve {PFC} represents the maximum amount of two goods or services produced by manufacturers in an economy. {a} Draw a correctly labeled PPC. for US. production of consumer and capital goods. {b} Policy makers enact an investment tax credit for rms that nance technological research and development. Assuming producers of both consumer and capital goods are affected, illustrate on your PPC the longtenn effects of this tax credit. {c} Using a correctly labeled graph of the longmo aggregate supply curve, show how the natural rate of output would respond to the tax credit in the long run. Explain. {d} How are the PPC and longrun aggregate supply curve similar? Type your answer here: [Scorerrrresonm offpoio} 3-. Assume the United States has a trade surplus with Brazil and imposes new tariffs on Brazilian coffee, a major export to the United States. {a} Describe the effect of the tan'tf on the equilibrium price and quantity of coffee in the United States. {b} What aect will the tariff have on the current account balance in the United States? Explain. {c} Brazil responds by imposing their own tan'if on U.S.made agricultural machinery. a. The Braziian purchase of US. agn'cultural machinery is a debit to which subaccount of the Brazilian balance of payments? b. What will happen to the quantity of agricultural machinery produced by Brazilian manufacturers? Type your answer here