Evidence suggests that a liquidity trap is possible when
A) real interest rates are at zero.
B) real interest rates are at or just above zero.
C) nominal interest rates are at zero.
D) nominal interest rates are at or just above zero.
C
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Capital gains are a type of income earned from
A) interest on savings accounts. B) employment in a factory. C) the sale of assets. D) all of the above.
A rightward shift of the Mexican demand curve for foreign exchange will
a. decrease the price of foreign exchange in Mexico b. increase the value of the peso c. make foreign goods less expensive in terms of pesos d. make foreign goods more expensive in terms of pesos e. make Mexican goods more expensive in terms of foreign exchange
The theory of consumer choice is based on the hypothesis that each consumer wants to
A. maximize her total utility. B. maximize her marginal utility. C. minimize the rate at which her marginal utility diminishes. D. minimize the percentage of her consumption diverted to inferior goods.
The life-cycle theory of consumption predicts that when Jason anticipates a higher income in the future, then Jason will
A. consume less and save more in the current period. B. not change the amount of consumption or saving in the current period. C. consume more and save less in the current period. D. consume less and save less in the current period.