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Therefore the opportunity cost is implicit in all economic decision making, whether by individual consumer, business firms or government. Another example, when there is high unemployment the government may adopt the policy of lowering interest rates and increasing its spending. The government will be hoping that these actions will encourage individuals and businesses to increase their spending. By doing this, individuals and businesses will stimulate the demand for goods and services and this should result in reduced unemployment.
Opportunity cost is best illustrated by a production possibility frontier or curve...
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