The value of the best alternative sacrificed to obtain something you want is referred to as
A) explicit cost.
B) opportunity cost.
C) accounting cost.
D) tangible cost.
Answer: B
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A level of GDP cannot be at equilibrium when aggregate demand exceeds output because firms will notice that
A. inventory stocks are building up. B. inventory stocks are being depleted. C. their profits are negative. D. many of their workers have little to do.
Junk bonds are securities with
a. low risk and low yield. b. high risk and high yield. c. low risk and high yield. d. high risk and low yield.
An example of an excludable good or service is a:
A. movie in a theater. B. city park. C. rainbow. D. levee system.
One reason the decline in asset prices just before and during the 2008 recession undermined the health of the economy is that they:
A. raised the trade deficit when foreigners reduced purchases of U.S. assets. B. led to a contraction in consumer loans because the value of collateral declined. C. raised the value of the dollar making U.S. goods more expensive to foreigners. D. undermined consumer and business confidence.