The consensus is that approximately ________ percent of U.S. households are subject to a liquidity constraint in consumption
A) 75
B) 55
C) 35
D) 15
E) 5
D
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Suppose Johnny Stroller sells 12, 25, and 75 year-old scotch in under black, red, and blue labels. Suppose the storage costs are zero and the initial production costs are the same. What is the implied (approximate) interest rate if black sells for $12, red for $16 and blue for $44
a. 2 b. 5 c. 8 d. 10
The consumption function shows
a. how fast the economy is consuming its capital. b. that the amount of national income determines the rate at which the economy consumes its resources. c. that households’ incomes determine how much the households will spend for consumer goods. d. the rate at which people actually use up their consumer goods.
Why is the paradox of thrift considered to be a paradox? Because an increase in saving causes
a. consumption to fall, causing the equilibrium level of national income to fall, thus leaving saving unchanged or even lower b. consumption to also rise, causing the equilibrium level of national income to rise, resulting in higher than anticipated saving c. investment to also rise, causing the equilibrium level of national income to rise,resulting in higher than anticipated saving d. investment to fall, causing the equilibrium level of national income to fall, thus leaving saving unchanged e. consumption to fall, causing the equilibrium level of national income to rise, resulting in higher than anticipated saving
Legislation that offers immediate and easily recognized benefits, at the expense of costs that are observable only in the distant future, is often enacted, even when economic inefficiency results. In economics this is referred to as the
a. long-term effect. b. political-fallacy effect. c. shortsightedness effect. d. inefficiency effect.