Which of the following does not determine consumption expenditure?
a. Disposable income
b. Wealth or credit
c. Expected future come
d. Unexpected inflation
d. Unexpected inflation
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When unemployment is below its natural rate, the inflation rate will eventually
A) move to its natural rate. B) decrease. C) become equal to the natural rate of unemployment. D) increase.
Sam has preferences for weekly Video Games (V) and Sodas (S) described by the utility function U(V,S) = V2S2. Suppose the prices are denoted by pV and pS and Sam has income given by I
Assume that in Sam's optimal bundle, he consumes strictly positive quantities of both goods. a. Write out Sam's optimization problem and the associated Lagrangian expression. b. Compute the three critical value (first-order) conditions from the Lagrangian. c. Using your answer to b, find the expression for the optimal bundles as functions of the prices and income.
In 2008, Morgan Stanley and Goldman Sachs decided to ______.
a. declare bankruptcy b. sell out to other banks c. become commercial banks d. become investment banks
The recessions of the 1970s are often attributed to an increase in oil prices.
Answer the following statement true (T) or false (F)