Most Economists Agree That the Best Rate of Inflation for a Stable

question 139

Multiple Choice

Most economists agree that the best rate of inflation for a stable economy would be around:

• A) zero.
• B) two to three percent.
• C) five to six percent.
• D) seven percent.

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Definitions:

Implicit Costs

The opportunity costs of using resources that a firm already owns, representing the income the firm foregoes by using those resources internally rather than renting or selling them.

Explicit Costs

Explicit costs are direct, out-of-pocket payments for resources or services needed for production, such as wages, rent, and materials; they're easily quantifiable and recorded.

Explicit Costs

Direct, out-of-pocket expenses incurred in conducting a business activity or making a decision.

Accounting Profits

The financial gains of a company calculated by subtracting total expenses from total revenues according to standard accounting practices.