Suppose real disposable income increases by 1,000. Given this information, we know that
A) consumption will generally increase by more than 1,000.
B) saving will generally increase by exactly 1,000.
C) consumption will generally increase by exactly 1,000.
D) consumption will generally increase by less than 1,000.
Question 2
Which of the following statements is true?
A) An optimizing individual is also likely to exhibit rationality.
B) Optimization requires individuals to foresee the future perfectly.
C) The less information that is available, the easier it is to make optimal decisions.
D) An optimizing individual need not consider the risks involved in various choices.
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