Precautionary saving is saving:
A. done in anticipation of sales or bargain in the future.
B. for the purpose of leaving an inheritance.
C. for protection against unexpected setbacks, such as the loss of a job or a medical emergency.
D. to meet long-term objectives, such as retirement, college attendance, or the purchase of a home.
Answer: C
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If Country A's real GDP per person is growing at 6 percent and Country B's real GDP per person is growing at 3 percent, then
A) the standard of living is higher in Country A. B) the standard of living is higher in Country B. C) the standard of living is growing more rapidly in Country A. D) We cannot say whose standard of living is growing more rapidly without knowing the population growth rate. E) We cannot say whose standard of living is growing more rapidly without knowing the growth rate of real GDP.
Total factor productivity shocks are not a good explanation of economic fluctuations in the New Keynesian model for all the following reasons except
A) they do not generate output fluctuations. B) employment drops when TFP increases. C) the real wage drops when TFP increases. D) they do not generate price fluctuations.
If two workers can produce 22 units of output, and the addition of a third worker increases output to 30 units, the marginal product of the third worker is:
A. 8 units. B. 10 units. C. 22 units. D. 30 units.
Which of these is not a beneficial supply shock?
What will be an ideal response?