Author Question: For a borrower, an increase in the real interest rate A) definitely reduces current consumption ... (Read 58 times)

ghost!

  • Hero Member
  • *****
  • Posts: 560
For a borrower, an increase in the real interest rate
 
  A) definitely reduces current consumption and increases future consumption.
  B) reduces current consumption and has an uncertain effect on future consumption.
  C) has an uncertain effect on current consumption and increases future consumption.
  D) has an uncertain effect on both current and future consumption.

Question 2

In the New Keynesian open economy model
 
  A) the nominal exchange rate is always fixed.
  B) prices are flexible.
  C) net exports depends on the relative price of foreign goods to domestic goods.
  D) the nominal exchange rate is always flexible.



nmyers

  • Sr. Member
  • ****
  • Posts: 336
Answer to Question 1

B

Answer to Question 2

C



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Despite claims by manufacturers, the supplement known as Ginkgo biloba was shown in a study of more than 3,000 participants to be ineffective in reducing development of dementia and Alzheimer’s disease in older people.

Did you know?

Adolescents often feel clumsy during puberty because during this time of development, their hands and feet grow faster than their arms and legs do. The body is therefore out of proportion. One out of five adolescents actually experiences growing pains during this period.

Did you know?

More than one-third of adult Americans are obese. Diseases that kill the largest number of people annually, such as heart disease, cancer, diabetes, stroke, and hypertension, can be attributed to diet.

Did you know?

Most childhood vaccines are 90–99% effective in preventing disease. Side effects are rarely serious.

Did you know?

The people with the highest levels of LDL are Mexican American males and non-Hispanic black females.

For a complete list of videos, visit our video library