Steven lives in a big city where there is a shortage of parking. He has a parking spot in his driveway where he parks his car. Which of the following statements is most correct?
A) The opportunity cost of using the spot is zero, because Steven owns the house.
B) Steven has a lower opportunity cost of owning a car than his neighbor, who must rent a parking spot.
C) The opportunity cost of using the parking spot is the price he could charge someone else for using the spot.
D) The opportunity cost depends on how much Steven's mortgage payment is.
C
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Which of the following is NOT a monetary policy tool of the Federal Reserve?
A) changes in required reserves B) last resort loans C) deposit insurance D) open market operations
A higher deficit in the current year will lead to increased debt in the future only if
A) the deficit is greater than the previous year's deficit. B) the deficit-to-GDP ratio is greater than the debt-to-GDP ratio. C) it causes a drop in private saving. D) it causes an increase in private saving. E) none of the above