In economics, we assume rational decisions are made when individuals weigh:
A. the sunk costs versus the opportunity costs of an action.
B. the sunk costs versus the benefits of an action.
C. the opportunity costs versus the benefits of an action.
D. the opportunity and sunk costs versus the benefits of an action.
Answer: C
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All the following actions represent fiscal policy EXCEPT
A) an increase in government spending. B) a reduction in individual income tax rates. C) a reduction in the money supply by the Federal Reserve. D) an increase in corporate income tax rates.
Which of the following is TRUE of M2?
A) It is larger than M1. B) It excludes savings deposits. C) It does not include highly liquid components of the money supply. D) It is less than M1.
Moral hazard in a transaction hurts
a. The seller only b. The buyer only c. Both parties d. None of the parties
Nominal GDP includes the current value of services produced in the economy
a. True b. False Indicate whether the statement is true or false