The real interest rate rises:
a. When society, as a whole, is less willing to give up consumption today for consumption in the future.
b. When society, as a whole, is more willing to give up consumption today for consumption in the future.
c. When expected inflation rises. It has nothing to do with whether or not a society is more or less willing to give up consumption today for tomorrow.
d. When expected inflation falls. It has nothing to do with whether a society is more or less willing to give up consumption today for tomorrow.
.A
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Answer the following statement(s) true (T) or false (F)
1. The major reason education leads to higher wages is due to signaling. 2. Attending college can be seen as an individual’s attempt to raise their level of human capital. 3. Since mowing ones lawn is not done at their workplace, it is viewed as a use of their leisure time and thus (somewhat paradoxically) falls into the category of leisure. 4. One deficiency of labor-leisure indifference curve analysis is that because indifference curves are always tangent to the worker’s budget line, the model can not explain why some people choose not to work. 5. A firm’s marginal revenue product of labor equals the marginal product of labor times the cost per unit of the labor.
If the price effect outweighs the income effect of a wage increase, the labor-supply curve will:
A. slope downward. B. slope upward. C. be perfectly horizontal. D. be perfectly flat.
An increase in the rate of interest would increase
A. the opportunity cost of holding money. B. the transactions demand for money. C. the asset demand for money. D. the price of bonds.
Most monetarists advocate an activist monetary stabilization policy.
Answer the following statement true (T) or false (F)