The Cost of an Activity Paid for by the Individual

question 74

Multiple Choice

The cost of an activity paid for by the individual and the third party is defined as a(n) :

• A) internal cost.
• B) social cost.
• C) external cost.
• D) third-party cost.
• E) public-good cost.

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Definitions:

Purchasing-power Parity

A theory in economics that states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries.

Nominal Exchange Rate

The rate at which one currency can be exchanged for another without adjusting for inflation.

Prices

The amount of money required to purchase a good or service.

Arbitrage

The simultaneous purchase and sale of the same asset in different markets to profit from tiny differences in the asset's listed price.