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Author Question: Which of the following events would likely cause the largest increase in current consumption? A) ... (Read 40 times)

123654777

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on: Jun 30, 2018
Which of the following events would likely cause the largest increase in current consumption?
 
  A) a permanent increase in annual salary of 2000
  B) a one-time tax cut of 4000
  C) a one-time increase in income (e.g. a bonus) of 4000
  D) both B and C

Question 2

For a given nominal interest rate, a reduction in expected inflation will cause
 
  A) a reduction in the real interest rate.
  B) an increase in the real interest rate.
  C) an increase in investment.
  D) an increase in money demand.


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jsm54321

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Reply #1 on: Jun 30, 2018
Answer to Question 1

A

Answer to Question 2

B


123654777

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Reply 2 on: Jun 30, 2018
YES! Correct, THANKS for helping me on my review

phuda

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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