Suppose the best investment you could make with $200,000 in cash is to purchase a government bond that pays 10 percent interest per year. If you decide to invest the money in your own business instead of buying the government bond, the opportunity cost
of this financial capital is
A) $2,000 per year.
B) $200,000 per year.
C) $20,000 per year.
D) zero, because you already had the $200,000.
Answer: C
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Joshua claims that the U.S. jewelry industry is in trouble because U.S. jewelry workers are unionized, whereas jewelry workers in less-developed countries are not. Joshua is using which argument against free trade?
a. diversity of industry argument b. national security argument c. infant industries argument d. cheap foreign labor argument e. antidumping argument
The demand for reserves increases as the price level rises because
A. people want money to buy goods that will appreciate with inflation. B. people need more money to finance transactions. C. the opportunity cost of holding money increases. D. higher prices reduce the value of dollar assets.
In 2011, the top 1 percent of all taxpayers in the United States faced an overall federal tax rate of:
A. 39.6 percent. B. 60.9 percent. C. 33.0 percent. D. 29.0 percent.
If the CPI is currently 202, what does this tell you about inflation between last year and this year?
A) There was deflation in the economy between this year and last year. B) Inflation in the economy between this year and last year was 2%. C) Inflation in the economy between this year and last year was 102%. D) The CPI measures only the level of prices in a given year, not the percentage change in prices from one year to the next.