A rightward shift in the intertemporal budget line would be ...

[mynx]

A rightward shift in the intertemporal budget line would be caused by ________.
 
  A) an increase in future income and wealth
  B) an increase in future income and a decrease in wealth
  C) a decrease in future income and an increase in wealth
  D) a decrease in future income and wealth

Question 2

Acme Brands invested 5 million in 2010 on new equipment, spent 750 thousand to increase its inventory of intermediate components, and added 25 thousand to its inventory of finished goods.
 
  At year's end, the components inventory is found to be 200 thousand above its beginning-of-the- year level, and finished goods inventory is up 30 thousand over its starting level. Calculate planned investment, unplanned investment, and actual (total) investment.

[cassie_ragen]

Answer to Question 1

A

Answer to Question 2

Planned investment is 5 million plus 750 thousand plus 25 thousand equals 5.775 million. Unplanned investment is 200 thousand minus 750 thousand plus 30 thousand minus 25 thousand equals negative 545 thousand. Actual investment is 5 million plus 200 thousand plus 30 thousand equals 5.23 million (equals 5.775 million minus 545 thousand).