Suppose consumers anticipate that their wealth will grow over time, because of interest earnings and capital gains. According to the life-cycle hypothesis, such optimism should cause current consumption to be ________
A) relatively low
B) relatively insensitive to changes in income
C) rising as individuals near retirement age
D) relatively high
D
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The purchase of Treasury securities by the Federal Reserve will, in general
A) not change the money supply. B) decrease the quantity of reserves held by banks. C) increase the quantity of reserves held by banks. D) not change the quantity of reserves held by banks.
Which of the following will cause the LM curve to shift to the right?
A) An increase in investment B) An increase in money demand C) A decrease in velocity D) An increase in the money supply
Workers’ reluctance to take nominal pay cuts offers a feasible explanation of why the Phillips Curve relation breaks down when there is deflation.
a. true b. false
Which of the following could impede productivity improvements?
A. Technological advances. B. Management training. C. Higher ratios of capital to labor. D. Lack of savings.