Which of the following peoplenone of whom has any financial or ...

[tuffie]

Which of the following peoplenone of whom has any financial or housing wealthis most likely to be spending all of their current income?
 
  A) a low income person expecting continued low income throughout life
  B) a low income person expecting a dramatic rise in income in the future
  C) a high income person expecting continued high income throughout life
  D) a high income person expecting a dramatic drop in income in the future
  E) a high income person expecting to retire soon, and live for a long time afterward

Question 2

Based on our understanding of the IS-LM model that takes into account dynamics, we know that a reduction in government spending will cause
 
  A) an immediate drop in Y and immediate increase in i.
  B) an immediate reduction in i and no initial change in Y.
  C) a gradual reduction in i and gradual reduction in Y.
  D) a gradual reduction in i and an immediate reduction in Y.

[rekilledagain]

Answer to Question 1

B

Answer to Question 2

C

[tuffie]

Excellent

[amandanbreshears]

TYSM