A graduate student is likely to consume less than a factory worker because the
A. factory worker bases consumption on permanent income while the graduate student does not.
B. graduate student bases consumption on current income while the factory worker does not.
C. graduate student's permanent income is likely lower than the factory worker's permanent income.
D. none of the above
Answer: C
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The decline in the value of the yen in 2014 and 2015 occurred as a result of the Japanese central bank, the Bank of Japan, following an expansionary monetary policy
Investors expected that the result would be lower nominal Japanese interest rates and a higher inflation rate. In response, investors ________, causing the value of the yen to decline against the dollar. A) bought Japanese yen and sold U.S. dollars B) bought Japanese yen and bought U.S. dollars C) sold Japanese yen and bought U.S. dollars D) sold Japanese yen and sold U.S. dollars
Discuss why the empirical support for PPP and the law of one price is weak in recent data
What will be an ideal response?
If an economy at the equilibrium level of GDP experiences an increase in the amount of investment spending, then inventories will be
a. depleted, causing firms to cut production. b. accumulated, causing firms to cut production. c. depleted, causing firms to increase production. d. accumulated, causing firms to expand production.
If individual A has comparative advantage in painting and individual B has comparative advantage in carpentry, then
A. specialization will not occur, since each does not have a clear absolute advantage. B. individual B will specialize in painting. C. there is a lower opportunity cost (expressed in units of carpentry) for individual A to paint than for individual B to paint. D. individual A must use fewer hours to paint a fence than individual B.