For consumers with a binding borrowing constraint, a decrease in the real interest rate ________
A) decreases consumption now, and in the future
B) increases consumption now, and in the future
C) decreases consumption now, and increases future consumption
D) has no impact on consumption
D
You might also like to view...
The weighted average of all possible outcomes of a project, with the probabilities of the outcomes used as weights, is known as the
A) variance. B) standard deviation. C) expected value. D) coefficient of variation.
Savings and investment are equal:
A. at the equilibrium in the market for loanable funds. B. because banks regulate their flow. C. at an interest rate set by the Fed. D. when banks operate according to banking regulations.
The federal funds rate is determined in a market and targeted by the Fed
a. True b. False
A price elasticity of demand of 5 means that for every 1 percent change in price, the quantity demanded will change in the opposite direction by 5 percent
a. True b. False Indicate whether the statement is true or false