Suppose the best investment you could make with $100,000 in cash is to purchase a government bond that pays 14 percent interest per year
If you decide to invest the money in your own business instead of buying the government bond, the opportunity cost of this financial capital is A) $1,400 per year.
B) $100,000 per year.
C) $14,000 per year.
D) zero, because you already had the $100,000.
C
You might also like to view...
The short-run aggregate supply curve is upward-sloping because: a. the quantity of real output supplied is inversely related to aggregate supply
b. nominal incomes are fixed. c. of the conjunction between the incremental capital-output ratio and the interbank offer rate. d. an increase in price will increase the supply of money.
The more substitutable capital and labor are in production, the more likely it is that the cross-price demand curve for capital (relative to the wage) is upward sloping.
Answer the following statement true (T) or false (F)