Stephanie has decided to eat lunch between classes. She has ranked her choices, from highest to lowest as, (1 ) turkey sandwich, (2 ) tuna sandwich, (3 ) slice of cheese pizza, (4 ) cheeseburger. The opportunity cost of the eating turkey sandwich is
A) the combined value of the tuna sandwich, slice of cheese pizza and cheeseburger.
B) the value of tuna sandwich, the next best choice.
C) the value of the cheeseburger.
D) zero since she has satisfied a want.
Answer: B
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The Fed's purchase of U.S. government securities constitutes
a. a restrictive policy because it lowers the amount of total reserves in the banking system. b. a restrictive policy because it lowers the amount of excess reserves in the banking system. c. an expansionary policy because it raises the amount of total reserves in the banking system. d. an expansionary policy because it lowers the amount of required reserves in the banking system.
The real business cycle model focuses on how
A) wage and price stickiness explains fluctuations in real GDP. B) the labor theory of value is the best measure of value of a good or service. C) the Federal Reserve should adopt a monetary growth rule. D) productivity shocks explain fluctuations in real GDP.