For a consumer bound by the collateral constraint, a reduction in the price of the collateral leads to
A) nothing.
B) an increase in current consumption and a decrease in future consumption.
C) a decrease in current consumption and no change in future consumption.
D) a decrease in current and future consumption.
C
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Has world trade increased continually over the 60 years?
What will be an ideal response?
The unemployment rate can remain below the natural rate, but only _____
a. in the long run b. with continuous deflation c. with a continuously increasing inflation rate d. with a series of adverse supply shocks e. if the money supply is constant
All of the following are examples of institutions that promote real economic growth EXCEPT
A) complex rules associated with business licensing used to promote careful business growth. B) patent laws that protect innovation. C) an efficient judicial system used to enforce contracts. D) strong law enforcement used to protect business interests.
Workers and firms both expect that prices will be 3% higher next year than they are this year. As a result,
A) the short-run aggregate supply curve will shift to the left as wages increase. B) the purchasing power of wages will rise if wages increase by 3%. C) workers will be willing to take lower wages next year. D) aggregate demand will increase by 3%.