Figure 7.5
The consumer must decide how to split $20 between spending and saving.Refer to Figure 7.5. If the consumer is subject to present bias, he/she will consume ________ now and save ________ to maximize utility.
A. $12; $8
B. $18; $2
C. $12; $2
D. $0; $20
Answer: B
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The rental rate approach to investment choices by firms and the present value approach
a. always agree. b. agree only if depreciation is 0. c. agree only if the price of equipment does not change. d. agree only when inflation rates are zero.
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a. $12. b. $14. c. $15. d. $20.
All of the following represent government spending as a part of aggregate demand except for:
A. Flood control. B. National parks. C. Police and fire protection. D. Social Security checks