In the Mainstream View, One Major Source of Instability in the Macroeconomy

question 113

Multiple Choice

In the mainstream view, one major source of instability in the macroeconomy is the volatility of

• A) product prices.
• B) investment spending.
• C) consumer spending.
• D) labor wages.

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Definitions:

Implicit Costs

The opportunity costs of using resources owned by the firm for its own production instead of earning revenue from these resources elsewhere.

Explicit Costs

These are the direct, out-of-pocket payments made by businesses for operational expenses like wages, rent, and materials.

Monetary Outlay

The amount of money spent on a particular transaction or investment.

Implicit Costs

The opportunity costs that arise when a company uses internal resources without a direct payment.