If the market interest rate is 5 percent,the opportunity cost of $100 spent on the purchase of goods _____

Question

Quizplus · Accepted Answer

The opportunity cost of spending $100 today, when the market interest rate is 5 percent, is the foregone interest that could have been earned if that $100 were saved or invested. Therefore, the correct answer is $105 next year, as the $100 would have grown to $105 in one year at a 5 percent interest rate.

If the Market Interest Rate Is 5 Percent,the Opportunity Cost