Limited commitment means
A) one cannot credibly promise something.
B) one saves only part of what is optimal.
C) only some households are allowed to save.
D) there is rationing on the credit market.
A
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The labor supply curve is backward bending because at higher wages the income effect eventually dominates the substitution effect
Indicate whether the statement is true or false
Velocity is defined as
A) P + M + Y. B) (P × M)/Y. C) (Y × M)/P. D) (P × Y)/M.
The domestic real interest rate (r) for a given country must be the same as the world real interest rate (rw) ________
A) if perfect capital mobility is assumed B) because with no barriers to capital flows, if rw > r domestic residents would just borrow abroad putting upward pressures on the domestic rate until both rates equal each other C) because with no barriers to capital flows, if rw < r domestic residents would only lend to foreigners putting downward pressures on the domestic rate until both rates equal each other D) all of the above E) none of the above
The ________ program was created in 1975 to provide rebates of Social Security taxes to low-income workers
A) food stamp B) SSI C) TANF D) EITC