The opportunity cost of growth is
A) a reduction in current investment.
B) a reduction in current consumption.
C) a reduction in taxes.
D) a reduction in current saving.

Question

Quizplus · Accepted Answer

The opportunity cost of growth refers to the potential loss of current consumption in order to invest in future growth. This means that in order to invest in growth, resources must be diverted away from current consumption, implying a reduction in current consumption. Therefore, the correct answer is B – a reduction in current consumption.

The Opportunity Cost of Growth Is