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
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Some people argue that protection discourages dependency. Explain this argument
What will be an ideal response?
A decrease in money demand will shift the
A) IS curve to the left. B) IS curve to the right. C) LM curve to the left. D) LM curve to the right.
If the interest rate rises, the present discounted value of a stream of payments owed in the future:
a. rises. b. stays constant. c. falls. d. may rise or fall depending on the shape of the stream.
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.
a. 133 b. 36.8 c. 3.68 d. 13.3