Opportunity cost is
A) the cost of producing all goods and services in the United States.
B) the value of the next-best alternative that must be sacrificed to satisfy a want.
C) the fixed cost of production.
D) the value of the most useful alternative that must be sacrificed to obtain something or satisfy a want.
Answer: B
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For this question, assume that exchange rates flexible and that the exchange rate expected to occur in one year is not constant. Suppose that individuals now expect that the domestic central bank will pursue expansionary monetary policy in one year. This expected future monetary expansion will cause which of the following to occur?
A) The current nominal exchange rate will decrease. B) The current nominal exchange rate will increase. C) The current nominal exchange rate will not change. D) The effects on the current nominal exchange rate are ambiguous.
When the rate of interest rises, the resulting change in the demand for capital is shown graphically by:
a. a movement down along the demand curve. b. a rightward shift of the demand curve. c. a leftward shift of the demand curve. d. a movement up along the demand curve. e. an outward rotation of the demand curve.