Consider two lottery winners, Tino who is 65 years old and Sasha who is 32 years old. Which of these two would be expected to have the larger income effect, all else equal?
A) Sasha
B) Tino
C) Both would have no income effect.
D) Both would have equal income effects.
B
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At a 3.5 percent annual growth rate it would take 20 years for GDP per capita to double
Indicate whether the statement is true or false
Fill in the blanks: ________ is defined as a sustained ________ in the purchasing power of money
A) Inflation; fall B) Deflation; fall C) Inflation; rise D) Answers B and C above are both true.
The concept of a "merit good" violates the presumption of "consumer sovereignty"
Indicate whether the statement is true or false
If the real interest rate were -7%, this is:
a. A clear sign that it is better to borrow than to lend. b. Not clear sign that it is better to borrow than to lend because this decision depends on expected inflation. c. Actually, it is impossible for the real interest rate to be -7% because the real interest rate can approach zero, but it can never be less than zero. d. A clear sign that it is better to lend than to borrow.