Each seller's opportunity costs are:
A. determined monetarily, which is why they can never be zero.
B. determined by a number of factors, none of which is monetary.
C. determined by a number of factors, including monetary considerations.
D. less than the monetary costs of manufacturing the good or service.
C. determined by a number of factors, including monetary considerations.
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All of the following are examples of automatic stabilizers except
A) personal income taxes. B) means-tested federal transfer payments. C) welfare benefits. D) government emergency spending.
For inflation to have no real effect on the economy, leaving all decisions and their real outcomes unchanged, five conditions must be met. Which of the following incorrectly states one of those conditions?
A) Inflation is universally and accurately anticipated. B) All savings and money earn the nominal interest rate. C) Inflation of p0 percent lowers the nominal interest rate by p0 below the no-inflation nominal rate. D) Only real interest income is taxable and only the real cost of borrowing is tax-deductible. E) Inflation raises the prices of all goods by the same percentage.