Homework Answers
Ans3) the correct option is a) current Income
Ans4) the correct option is b) the difference between the actual income and permanent income.
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3. According to Keynes, the main determinant of the consumption level is a) current income. b)...
1. If the real interest rate is denoted by p, the present value of consumption in...
1. If the real interest rate is denoted by p, the present value of consumption in an intertemporal choice model of two periods is given by? a) ci +c2/(1+p) b) c1 (1-)+c7/(1-P) c) ci/(1+p) +c2/(1-P) d) ci tc2 2. The household's rate of time preference is given by a) the slope of the budget constraint. b) the slope of the indifference curves. c) the real rate of interest. d) the slope of the 45° line. 3. According to Keynes, the...
1. According to Keynesian theory, the primary determinant of the level of consumption and saving in...
1. According to Keynesian theory, the primary determinant of the level of consumption and saving in the economy is the: a. level of investment. c. level of prices. b. level of income. d. interest rate. 2. If a family's MPC is. 7, it is: a. spending 70 percent of its income on consumer goods. b. necessarily dissaving. c. spending seventenths of any increment to its income d. operating at the breakeven point. The size of the MPC is assumed to...
QUESTION 18 Which of the following is not an autonomous determinant of consumption expenditures? a. current...
QUESTION 18 Which of the following is not an autonomous determinant of consumption expenditures? a. current disposable income b. tastes and preferences c. the interest rate d. real wealth
ents is true concerning the consumption function et e n between ale Ince ction lies above...
ents is true concerning the consumption function et e n between ale Ince ction lies above the 45-degree line, then that is independent of the level of disposable income is a. It alopes upward. b. Ito alope equals the MC. It represents the direct positive relation naumption spending and the level of real If the consumption function lies above saving is positive. e. All of the above. 9. Consumption spending that is independent of the known as: a marginal consumption....
2) A decrease in the real wage A) unambiguously increases consumption and increases labour supply. B)...
2) A decrease in the real wage A) unambiguously increases consumption and increases labour supply. B) increases consumption and has an ambiguous effect on labour supply. C) has an ambiguous effect on consumption and increases labour supply. D) has an ambiguous effect on both consumption and labour supply. E) decreases consumption and has an ambiguous effect on labour supply. 3) If labour supply curve is downward sloping, then A) There is no substitution effect B) Substitution effect is exactly equal...
Name Anaani la lacque Class 140 Date: Abu Sala ID: A Principles of Macro Multiple Choice...
Name Anaani la lacque Class 140 Date: Abu Sala ID: A Principles of Macro Multiple Choice Ident the choice thar best completes the statement or answer the question 1. Classical economie theory predicted that in the long run the economy would experience: a. below full unemployment. b. rising rate of inflation. c. full employment. d idle factors of production. 2. According to Keynes, what is the most important determinant of households spending on goods and services? a. The price level....
Date Class: Name: Principles of Macro Multiple Choice en the choice shares completes the statement o...
Date Class: Name: Principles of Macro Multiple Choice en the choice shares completes the statement o n the the y would 1. Classical economie theory predicted that in the long experience! below full unemployment. b ring rate of inflation. e full employment. d. idle factors of production. 2. According to Keynes, what is the most important determinant of household spending on goods and services? The price level. b. The interest rate. c. Autonomous consumption. d. Disposable income. 3. Keynesians: a...
According to Keynesian theory, the most important determinant of saving and consumption is Select one: a....
According to Keynesian theory, the most important determinant of saving and consumption is Select one: a. the level of real income. b. the stock of liquid assets. c. the stock of durable goods in the consumer's possession. d. the level of consumer indebtedness. Question 5 Not yet answered Marked out of 1.00 Flag question Question text In the Keynesian model, planned investment is inversely related to Select one: a. the interest rate. b. the level of income. c. the wage...
Question 1 (3 Points): Assume a consumer has current-period income y = 120, future-period income y'...
Question 1 (3 Points): Assume a consumer has current-period income y = 120, future-period income y' = 140, current and future taxes t = 20 and t' = 10, respectively, and faces a market real interest rate of r = 0.08, or 8% per period. The consumer has the following preferences over current and future consumption: U(c, c') = min(4c, 3c'). a) (1 points) Determine the consumer's lifetime wealth. b) (2 points) Determine what the consumer's optimal current-period and future-period...
When considering how a family's level of consumption changes in response to changes in its income,...
When considering how a family's level of consumption changes in response to changes in its income, A) income is the dependent variable and family consumption is the independent variable. B) consumption is the dependent variable and income is the independent variable. C) both of the variables are independent. D) both of the variables are dependent. E) there is no relationship between the variables. Suppose Ahmoud would spend $1200 per year on travel, even if his annual income were zero. As...
1. If the real interest rate is denoted by p, the present value of consumption in an intertemporal choice model of two periods is given by? a) ci +c2/(1+p) b) c1 (1-)+c7/(1-P) c) ci/(1+p) +c2/(1-P) d) ci tc2 2. The household's rate of time preference is given by a) the slope of the budget constraint. b) the slope of the indifference curves. c) the real rate of interest. d) the slope of the 45° line. 3. According to Keynes, the...
1. According to Keynesian theory, the primary determinant of the level of consumption and saving in the economy is the: a. level of investment. c. level of prices. b. level of income. d. interest rate. 2. If a family's MPC is. 7, it is: a. spending 70 percent of its income on consumer goods. b. necessarily dissaving. c. spending seventenths of any increment to its income d. operating at the breakeven point. The size of the MPC is assumed to...
QUESTION 18 Which of the following is not an autonomous determinant of consumption expenditures? a. current disposable income b. tastes and preferences c. the interest rate d. real wealth
ents is true concerning the consumption function et e n between ale Ince ction lies above the 45-degree line, then that is independent of the level of disposable income is a. It alopes upward. b. Ito alope equals the MC. It represents the direct positive relation naumption spending and the level of real If the consumption function lies above saving is positive. e. All of the above. 9. Consumption spending that is independent of the known as: a marginal consumption....
Name Anaani la lacque Class 140 Date: Abu Sala ID: A Principles of Macro Multiple Choice Ident the choice thar best completes the statement or answer the question 1. Classical economie theory predicted that in the long run the economy would experience: a. below full unemployment. b. rising rate of inflation. c. full employment. d idle factors of production. 2. According to Keynes, what is the most important determinant of households spending on goods and services? a. The price level....
Date Class: Name: Principles of Macro Multiple Choice en the choice shares completes the statement o n the the y would 1. Classical economie theory predicted that in the long experience! below full unemployment. b ring rate of inflation. e full employment. d. idle factors of production. 2. According to Keynes, what is the most important determinant of household spending on goods and services? The price level. b. The interest rate. c. Autonomous consumption. d. Disposable income. 3. Keynesians: a...
Question 1 (3 Points): Assume a consumer has current-period income y = 120, future-period income y' = 140, current and future taxes t = 20 and t' = 10, respectively, and faces a market real interest rate of r = 0.08, or 8% per period. The consumer has the following preferences over current and future consumption: U(c, c') = min(4c, 3c'). a) (1 points) Determine the consumer's lifetime wealth. b) (2 points) Determine what the consumer's optimal current-period and future-period...
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