Which of the following will not tend to shift the consumption schedule upward?
A. A currently small stock of durable goods in the possession of consumers.
B. The expectation of a future decline in the consumer price index.
C. A currently low level of household debt.
D. The expectation of future shortages of essential consumer goods.
B. The expectation of a future decline in the consumer price index.
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When borrowing money to purchase an automobile, Raul has the choice between a fixed nominal interest rate or adjustable nominal interest rate loan. Typically the adjustable rate loans start with a lower rate than the fixed rate loans. Given that, under what circumstances would Raul most likely want to borrow money at the higher fixed rate?
a. When he expects the inflation rate to rise b. When he expects the inflation rate to decrease c. When he expects the inflation rate to remain unchanged d. When he expects the price level to remain stable e. When he expects the government to act to lower the inflation rate
It is common for fashion trends to follow celebrity fashion choices. This is an example of:
A. inferring quality from price. B. bounded rationality. C. conspicuous consumption. D. focal point equilibrium.
If the equilibrium price of natural gas is $4 per thousand cubic feet and a price ceiling is imposed at $3 per thousand cubic feet, the result will be:
A. a surplus of natural gas. B. a shortage of natural gas. C. an accumulation of inventories of unsold gas. D. more natural gas available than what buyers want to buy.
Which of the following is not included in the current account?
A. exports of goods B. imports of goods C. U.S. capital inflow and outflow D. unilateral transfers