The opportunity cost of holding money
A. is based on the fiduciary monetary system.
B. is measured by the alternative interest yield obtainable by holding some other asset.
C. equals the amount paid for renting a house instead of buying it.
D. refers to the amount of paper currency held by the Fed.
Answer: B
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The existence of automatic stabilizers will
A) cause the effects of shocks to aggregate demand to have a larger effect on GDP. B) reduce the recognition lag of discretionary fiscal policy. C) eliminate recessions. D) reduce the size of recessionary and inflationary gaps.
Suppose that in an hour Joe can prepare 10 sandwiches or 5 pizzas. The opportunity cost of Joe producing one sandwich is
A) 2 pizzas. B) 1/2 pizza. C) 5 pizzas. D) 1 pizza.
Which of the following will cause a reduction in output per worker (Y/N)?
A) a reduction in the capital stock (K) B) a reduction in the saving rate C) a reduction in K/N D) all of the above
Which of the following is a government-inhibited good?
A. whisky B. public education C. soft drink D. cocaine