A person is dynamically consistent if:
A. his preferences over the alternatives available at some future date change as the date approaches.
B. his preferences over the alternatives available at some future date do not change as the date approaches.
C. he is also statically consistent.
D. None of these is correct.
A. his preferences over the alternatives available at some future date change as the date approaches.
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When China devalues its currency
a. the dollars per Chinese yuan will increase b. the drain of U.S. reserves on Chinese yuan will fall. c. U.S. exports to China will increase. d. the price of imported Chinese textiles in the U.S. will fall. e. Chinese imports will increase.
The value of an original painting, held as an asset, increased in value by 100 percent from 1970 to 2010. Suppose during the same period average prices in the economy rose by 150 percent. The owner of the painting, relative to those who do not own paintings, experienced a:
A. Higher real income as a result of the wealth effect. B. Higher real income as a result of the price effect. C. Lower real wealth as a result of the wealth effect. D. Lower real income as a result of the income effect.
Refer to the accompanying figure. Suppose all the sellers in this market started out charging a price of $45 per unit. What is the most likely result?
A. They would lower their prices because at $45 there would be excess demand. B. They would all make a large profit because $45 is more than the equilibrium price. C. They would lower their prices because at $45 there would be excess supply. D. They would all just break even because $45 is their reservation price.
When an employee at a grocery store scans the price of your items, bags the groceries, and collects your paper, the individual has provided
A) physical capital.
B) entrepreneurship.
C) a service.
D) land.