According to the life-cycle hypothesis, as consumers get older ________
A) the marginal propensity to consume out of wealth and income rise
B) the marginal propensity to consume out of wealth falls and the marginal propensity to consume out of income rises
C) the marginal propensity to consume out of wealth rises and the marginal propensity to consume out of income falls
D) the marginal propensity to consume out of wealth and income fall
C
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According to this Application, lower oil prices should ________ aggregate ________
A) increase; demand B) not change; demand C) decrease; demand D) decrease; supply
Suppose Hillary was offered the following choice: Option 1 is to win $10 for sure and Option 2 is to win $20,000 with odds of 1 in 2,000 and otherwise to win nothing. If Hillary is risk averse she
A. will choose Option 1. B. will choose Option 2. C. is indifferent between the two. D. will choose Option 1 or Option 2 with equal probability.
To a bank, reserves are classified as
A) an asset. B) a liability. C) equity D) a liability or an asset
Money is a concept that has a certain value at a point in time.
Answer the following statement true (T) or false (F)