Which one of the following variables is classified as a leakage in the output-income-spending flow model presented in the text?
Select one:
a. Household saving
b. Household Consumption
c. Income
d. Business Investment
a. Household saving
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Use the following graph to answer the next question.
The short-run equilibrium for this economy is at ________.
A. point e B. point f C. point g D. none of these points
Suppose you borrow $2,000 for one year and at the end of the year you repay the $2,000 plus $110 of interest. If the expected inflation rate was 2.2% at the time you took out the loan, what was the real interest rate you paid?
A) 2.2% B) 3.3% C) 5.5% D) 7.7%
If the substitution effect is stronger than the income effect, a decrease in real interest rates will ________ current consumption for households who are lenders and will ________ current consumption for households who are borrowers
A) increase; decrease B) decrease; increase C) increase; increase D) increase; have an unclear effect on
If other things constant, as more bananas are consumed, marginal utility eventually
a. decreases at the same rate for all people b. decreases at the same rate for all goods for a given person c. increases at the same rate for all people d. decreases at different rates for different people and for other goods e. decreases at different rates for different people but at the same rate as other goods for an individual