Decision Makers Household Sector MCQs

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If an individual earns $60,000 this year and $60,000 the following year, the real interest rate is 5%, the present value of income will be






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If the individual in 1) decides to consume $40,000 this year, how much can he consume in year 2?






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If the same consumer decides to consume $80,000 in year 1 by borrowing the additional $20,000, how much can he consume in year 2?






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In the Fisher diagram, the slope of the budget constraint line is expressed algebraically by






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The higher the real interest rate is






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As you move from right to left along the indifference curve, an individual’s total utility






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The indifference curve of the saver is






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The saver discounts the future more heavily than the borrower.




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If a rise in real interest rates causes a fall in the following period level of consumption, the individual must be






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An increase in income is reflected in the Fisher diagram and has the effect of






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A person with a liquidity constraint will






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The keynesian consumption function describes






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Which of the following statements best describes the relationship between consumption spending and disposable income?






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Which of the following statements is true?






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According to Milton Friedman’s Permanent Income Hypothesis, the marginal propensity to consume permanent income is ____________, whereas the pr...






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According to the Lifecycle Hypothesis, consumption is determined by two factors:






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A lower real interest rate means a _________ budget line.






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According to the lifecycle hypothesis, consumption is a function of the following variables except