The permanent income hypothesis indicates that increased savings will cause an increase in long term income
a. True
b. False
Indicate whether the statement is true or false
False
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Joe's Taco Hut can purchase a delivery truck for $20,000 and Joe estimates it will generate a net income (after taxes, maintenance and operating costs) of $2,000 per year. He has no other opportunities. He should:
A. purchase the truck if the real interest rate is greater than 10%. B. not purchase the truck if the real interest rate is greater than 2%. C. purchase the truck only if the real interest rate is less than 2%. D. purchase the truck if the real interest rate is less than 10%.
U.S. economic data from 1955 to 2000 show that both unemployment and inflation rates increased during that period
a. True b. False Indicate whether the statement is true or false
Buffalo in the United States almost became extinct while cattle have never been close to extinction. The difference is due to
A) the greater marginal value of a buffalo relative to a head of cattle, leading to greater "harvesting" of buffalo. B) the use of private property rights on cattle and common property rights on buffalo. C) the greater marginal value of a head of cattle relative to buffalo, leading to over-hunting of buffalo. D) the differences in size between the two animals, and the effect of size differences on the costs of hunting them.
The top 5 percent of health care users in the United States account for
A) 30 percent of all health costs. B) over 50 percent of all health costs. C) over 75 percent of all health costs. D) almost 90 percent of all health costs.