How does expected future income affect saving supply?
What will be an ideal response?
Expected future income affects saving supply because the lower a household's expected future income, the greater is its (current) saving supply.
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Economists classify energy and water as part of which factor of production?
A) land B) labor C) capital D) entrepreneurship E) land if undeveloped and capital if developed
Which of the following statements about junk (high-risk) bonds is true?
A) They never outperform treasury bonds since they're too risky. B) The price of junk bonds increase as their perceived risk increases. C) They tend to perform best during recessions. D) One can profit by owning them if market perceptions of their risk decline.
When the Fed raises the discount rate, it:
a. lowers the cost of borrowing from the Fed, encouraging banks to make loans to the general public. b. raises the cost of borrowing from the Fed, discouraging banks from making loans to the general public. c. increases the amount of excess reserves that banks hold, encouraging them to make loans to the general public. d. increases the amount of excess reserves that banks hold, discouraging them from making loans to the general public. e. decreases the amount of excess reserves that banks hold, discouraging them from making loans to the general public.
The real wage rate is defined as the wage rate divided by
a. the interest rate. b. the money supply. c. nominal GDP. d. the price level.