If you earn income now and expect to live off savings in the future, then a raise now will cause you to save more so long as consumption -- now and in the future -- is a normal good.
Answer the following statement true (T) or false (F)
True
Rationale: This is a pure wealth effect with no substitution effect. Thus, consumption now and in the future will increase, implying that you will save more (which is the only way future consumption can increase in the absence of a change in the interest rate.)
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An import quota is
A) a quantity restriction. B) a price ceiling. C) a price floor. D) something imposed on agricultural goods grown by American farmers.
A situation in which output decreases while prices increase is often referred to as:
A. inflation. B. negative economic growth. C. a recession. D. stagflation.
The primary use of derivative contracts is:
A. for IRA and other pension plans since they only have value well into the future. B. to add to the profits an investor obtains through information asymmetry. C. to shift risk among investors. D. for investors seeking a greater return by taking greater risk.
Patents and licenses are barriers to entry.
Answer the following statement true (T) or false (F)