A higher real interest rate typically induces consumers to:
a. Save less
b. Purchase more imported goods
c. Save more
d. Purchase more goods that are bought using credit
Answer: c. Save more
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If demand is price inelastic, a decrease in price
a. raises total revenue to the seller b. raises total expenditure on the good, but not total revenue to the seller c. reduces total revenue to the seller d. leaves total revenue to the seller unchanged e. leaves total expenditure on the good unchanged
Figure 14.1 shows three aggregate demand curves. A shift from curve AD2 to curve AD1 could be caused by a(n):
A. increase in the money supply. B. increase in taxes. C. increase in the price level. D. increase in government spending.
If a consumer has allocated income between pizzas and movies such that utility is maximized, and the price of pizza falls, when equilibrium is restored this consumer will:
a. consume less pizzas and the same amount of movies. b. consume less pizzas and more movies. c. consume more movies. d. consume more pizza.
A single currency area requires
A) mobile labor and synchronized business cycles. B) immobile labor and synchronized business cycles. C) immobile labor and mobile capital. D) mobile labor and unsynchronized business cycles.