The opportunity cost of economic growth is ________ and the benefit of economic growth is ________
A) increased current consumption; increased future consumption
B) increased current consumption; decreased future consumption
C) decreased current consumption; increased future consumption
D) decreased current consumption; decreased future consumption
E) nothing; increased future consumption
C
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People specialize in activities in which they have a comparative advantage
A) if they know they are more productive than anyone else in the particular activity. B) only if they understand the logic of comparative advantage. C) when they expect to obtain more of whatever they want by doing so. D) only when all of the above are true.
Commercial banks limit the adverse selection problem through ________
A) monitoring B) restrictive covenants C) screening D) moral hazard
When households find themselves holding too much money, they respond by
a. purchasing interest-earning financial assets and interest rates fall. b. purchasing interest-earning financial assets and interest rates rise. c. holding the extra money and interest rates rise. d. selling interest-earning financial assets, which eliminates the excess supply of money.
Which of the following is a liability for the central bank?
A) currency B) bonds C) savings accounts D) loans E) checkable deposits