When making a decision, it is easier to identify and evaluate which of the following?
A. Neither of these is often easy to identify and evaluate.
B. Benefits associated with the decision.
C. Costs associated with the decision.
D. Costs and benefits are equally easy to identify and evaluate.
Answer: B
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It is costly to hold money because
A. in doing so, one sacrifices interest income. B. bond prices are highly variable. C. the rate at which money is spent may decline. D. deflation may reduce its purchasing power.
If a sandwich shop produces zero sandwiches, which of the following costs will it still incur?
A. Employee's wages B. Sandwich ingredients C. Rented storefront D. None of these costs will be incurred if they no longer make sandwiches.
Assume that foreign capital flows into a nation rise due to expected increases in stock market appreciation. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the Three-Sector-Model? a. Real GDP rises and nominal value
of the domestic currency falls. b. Real GDP falls and nominal value of the domestic currency remains the same. c. Real GDP rises and nominal value of the domestic currency remains the same. d. Real GDP rises and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.
An inferior good is one in which
a. the average consumer chooses not to consume. b. the good is not equally valued by all consumers. c. an increase in income increases consumption of the good. d. an increase in income decreases consumption of the good.