Permanent income is
A. expected future income.
B. the average level of expected future income.
C. current income.
D. accumulated wealth.
Answer: B
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The Fed conducts an open market purchase of securities of $5,000. If the currency drain ratio is 0 percent and the desired reserve ratio is 10 percent, then the total increase in the quantity of money is
A) $4,000. B) $5,000. C) $20,000. D) $50,000. E) $10,000.
Make use of the quantity theory of money to solve the following problem
If the Fed has an inflation target of 2% and the velocity of money is constant, by how much should it increase the money supply each year if economic growth is expected to average 3%?
In the case where interest rates are lower in Japan, which of the following is an example of a "carry trade"
a. Increase borrowing in the US, convert to Yuan and invest in financial assets in Japan b. Increase borrowing in Japan and invest in Japan c. Increase borrowing in Japan, convert to Dollars and invest in the US d. Increase borrowing in the US and invest in the US
Which of the following might be an example of an economic argument against advertising?
a. It causes the demand for the good to be more elastic b. It allows the producer to earn an economic profit in the long run c. People may be deluded into thinking that a good with a brand name is better than an otherwise identical generic brand d. The claims made in the ads are almost always false