A firm's level of investment is tied to the interest rate
a. only when the firm has to borrow funds to buy capital
b. only when the firm has to borrow funds to buy stocks
c. only when the firm already has the funds and could lend them
d. because the interest rate represents the opportunity cost of investing in capital
e. because investments are always made with borrowed funds
D
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Trinh quits his $80,000-a-year job to become a full-time volunteer at a museum. What is the opportunity cost of his decision?
A) the value he attributes to the joy of working at a museum B) depends on the "going rate" of museum employees C) at least $80,000 D) 0 since he will no longer be earning a salary
The economic behavior of government is constrained by
a. limited budgets b. the absence of prices on most government output c. moral philosophy of the community d. low voter participation rates e. political self interest