Suppose that medical researchers discover a new drug which slows the aging process allowing the average life span in the United States to increase to 95 years of age. The lifecycle hypothesis suggests that

A) consumption spending would increase since lifetime income increases.
B) consumption spending would increase since estimates of permanent income would increase.
C) consumption spending would decrease since savings would rise to provide income for the longer retirement periods.
D) None of the above is correct since predicted future annual incomes may not change.


C

Economics

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If the interest rate rises, the present discounted value of a stream of payments owed in the future:

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By investing in both human capital and physical capital, Laci’s country has achieved an economic growth rate of 1.9 percent. Assuming Laci’s country can maintain this growth over time, the economy should double in approximately ______ years.

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Economics