An explicit cost is defined as
A) a cost that does not change as output changes.
B) a nonmonetary opportunity cost.
C) a cost that involves spending money.
D) a nonmonetary accounting cost.
Answer: C
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Which of the following is an example of government discretionary spending?
A) defense spending B) net interest paid on government debt held by the public C) Social Security retirement payments D) Medicare benefits for the elderly
Discuss how the marginal propensity to consume, imports, and marginal tax rates influence the expenditure multiplier
What will be an ideal response?
Which of the following is NOT one of the economic problems that the "New Economy" is alleged to have solved?
A) deflation B) slow growth in productivity C) the budget deficit D) business cycle
If government spending increases, which causes producers to hire more workers, and as a result households have more income to spend, which causes aggregate demand to increase even more, this is known as the:
A. Magnifying process. B. Multiplier process. C. Saving effect. D. Fiscal effect.