Current income is 300, expected future income is 363, and the interest rate is 10%. If consumption is to be the same in each period, each period’s consumption must be
a) 330
b) 300
c) 331.5
d) 333
e) 363
a) 330
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Which of the following is NOT shown explicitly in the circular flow model?
A) the governments' purchases in the goods market B) the taxes the governments collect from households C) the governments' interaction with firms D) the legal system E) the transfers the governments make to households
For interest rates to remain stable during economic expansions, the money supply should: a. decrease at a faster rate than the demand for money. b. grow at the same rate as money demand
c. grow at a faster rate than money demand. d. grow at a slower rate than money demand. e. decrease at a slower rate than the demand for money.
Which of the following statements is false?
a) Income elasticity of demand is positive for inferior products. b) Income elasticity of demand is negative for inferior products. c) Income elasticity of demand is positive for normal goods. d) None of the above.
Production that uses large amounts of human effort rather than machinery is said to be ______.
a. labor inefficient b. capital intensive c. labor intensive d. capital inefficient