Why is it important to distinguish between explicit and implicit costs?
Please provide the best answer for the statement.
Implicit costs are as important as the explicit costs which are generally the so-called “accounting costs.” For example, economists (but not accountants) would count the income forgone in the use of the owner’s time as an economic cost, the interest forgone by using one’s own funds, and so on for the use of other resources. These implicit costs should be counted so one can judge the true economic or opportunity cost of production. If these costs are neglected, then an over allocation of resources could occur because not all of the production costs are being measured.
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With unstable commodity demand and thus an unstable ________ curve, fluctuations in output are ________ by the fortuitous selection of ________ targeting
A) LM, minimized, money supply B) LM, eliminated, interest rate C) LM, minimized, interest rate D) IS, minimized, money supply E) IS, eliminated, interest rate
A temporary limitation on capital flows may help stop a financial crisis that has begun
Indicate whether the statement is true or false