Economics 0455 · IGCSE · Opportunity cost

Opportunity cost — practice question

The government cuts social security expenditure by $10 \text{ bn}$ so that defence spending can be increased by $10 \text{ bn}$. What kind of example does this illustrate?

  • Aexpansionary fiscal policy
  • Bmarket forces
  • Cprice stability
  • Dreallocation of resources

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