The life-cycle theory of consumption predicts that when a person anticipates a higher income in the future, then that person will
A) consume more and save less in the current period.
B) consume less and save more in the current period.
C) consume less and save less in the current period.
D) not change the amount of consumption or saving in the current period.
A
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What are the two main components of business cycle theories?
A) A description of shocks and a model of how the economy responds to them B) A model of how people decide to spend and a description of the government's role in the economy C) A model of how equilibrium is reached and a description of the government's role in the economy D) A description of shocks and a description of the government's role in the economy
With positive externalities, _____
a. the market equilibrium occurs at a greater quantity than the socially optimal output b. net social welfare is maximized c. the social benefit curve lies above the private benefit curve d. there is no deadweight loss
Which of the following will cause an increase in unemployment and inflation at the same time?
A. A leftward shift of aggregate demand. B. A rightward shift of aggregate supply. C. A leftward shift of aggregate supply. D. A rightward shift of aggregate demand.
Oligopoly is characterized by
A. identical products only. B. differentiated products only. C. high barriers to entry. D. many firms.