In the life-cycle hypothesis, people are assumed to have a consumption pattern that leads them to save
A) at no point in their life.
B) in the working years up to retirement.
C) in their retirement years.
D) in every year of their life.
B
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Pepsi and pizza are normal goods. When the price of pizza rises, the substitution effect causes Pepsi to be relatively
a. more expensive, so the consumer buys more Pepsi. b. more expensive, so the consumer buys less Pepsi. c. less expensive, so the consumer buys more Pepsi. d. less expensive, so the consumer buys less Pepsi.
Suppose Country Y produces only corn and clothing using only two inputs-land and labor. Production of corn requires an intensive use of land whereas clothing is a labor-intensive good. If the price of corn increases by 15 percent and the price of clothing remains constant, the Stolper-Samuelson theorem predicts that in the long run
A. the wage rate will increase by more than 15 percent. B. the rental rate of land will increase by 15 percent. C. the rental rate of land will increase by more than 15 percent. D. the wage rate will remain unchanged.
A rise in the nominal exchange rate ($/€) represents a depreciation of the dollar relative to the euro, but a rise in the real exchange rate ($/€) represent an appreciation of the dollar. Explain why this is true
What will be an ideal response?
The level of aggregate expenditures in a mixed open economy is comprised of:
A. C a + I g + X n B. C a + I g + G + T + X n . C. C a + I g + X n + G. D. C a + G.