A higher interest rate
A. decreases the motivation to delay consumption and, therefore, save.
B. increases the motivation to delay consumption and, therefore, borrow.
C. decreases the motivation to delay consumption and, therefore, borrow.
D. increases the motivation to delay consumption and, therefore, save.
Answer: D
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Given the expected rate of return on all possible investment opportunities in the economy, a(n)
A. change in the real interest rate will have no impact on the level of investment. B. increase in the real rate of interest will tend to increase the level of investment. C. decrease in the real rate of interest will tend to decrease the level of investment. D. decrease in the real rate of interest will tend to increase the level of investment.
A rational consumer who prefers one apple to two oranges, and two oranges to one orange,
a. must prefer two oranges to one apple b. must prefer one apple to one orange c. must prefer two oranges to two apples d. must be indifferent between two oranges and two apples e. might prefer one orange to one apple
Suppose a certain good provides an external benefit. If the private cost of the last unit of the good that was produced is equal to the social value of that unit, then the sum of producer and consumer surplus is maximized
a. True b. False Indicate whether the statement is true or false
The expenditure line in the Keynesian cross diagram represents the:
A. equilibrium condition that Y = Y*. B. relationship between consumption and after-tax disposable income. C. relationship between planned expenditure and output. D. equilibrium condition that Y = PAE.