________ might cause the borrowing constraint to become non-binding, even though the consumer still cannot borrow
A) An increase in future (expected) income
B) An increase in the real interest rate
C) A decrease in current income
D) A decrease in the real interest rate
B
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Which of the following illustrates a macroeconomic question?
A. What is the least costly way to produce automobiles and trucks in the United States? B. Should the salaries of financial executives be regulated by the government? C. Will the introduction of a new computer chip change the demand for computers? D. Are increasing wage demands by workers contributing to price inflation?
Fannie Mae and Freddie Mac's rapid increase in the percentage of all mortgages held encouraged mortgage lenders to
a. tighten credit standards and decrease the number of sub-prime loans extended to borrowers. b. offer lower rates than what Fannie Mae and Freddie Mac could offer. c. lower credit standards and offer terms acceptable to Fannie Mae and Freddie Mac. d. scrutinize the credit-worthiness of borrowers and require higher down payments on mortgages.
Current income is 300, expected future income is 363, and the interest rate is 10%. If current income rises to 363 and consumption is smoothed across periods, then consumption in each period becomes
a) 326.7 b) 363 c) 399.3 d) 350 e) 371
Assume that a 3 percent increase in income across the economy produces a 1 percent decline in the quantity demanded of good X. The coefficient of income elasticity of demand for good X is:
A. negative and therefore X is an inferior good. B. negative and therefore X is a normal good. C. positive and therefore X is an inferior good. D. positive and therefore X is a normal good.