The opportunity cost of an activity is
a. zero if you choose the activity voluntarily
b. the amount of money spent on the activity
c. the value of the best alternative not chosen
d. the sum of benefits from all of the sacrificed alternatives
e. the difference between the benefits and the costs of that activity
C
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Yolanda received a $100 savings bond for her birthday. The bond pays $100 at maturity, which is in five years. If the interest rate is 3%, the bond has a present value of $86.26
Indicate whether the statement is true or false
What is the "inflation tax"?
A) the difference between nominal and real interest rates received on financial assets, due to inflation B) the fact that our tax system is based on nominal incomes and not real incomes, so that the government collects more taxes due to inflation alone C) the government obtaining goods in exchange for newly created high-powered money that does not add to the real value of private assets due to the resulting inflation D) the fact that greater government spending leaves fewer goods available to the private sector, thus lowering their prices.