The typical economic life cycle illustrates how people tend to
a. borrow more when they are younger and save more when they are middle-aged.
b. earn their peak incomes immediately prior to the typical retirement age of 65.
c. adjust their consumption based on changes in their transitory income.
d. All of the above are correct.
a
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Suppose that nominal aggregate demand falls by 4 percent, and at the same time every marginal cost also falls by 4 percent. The importance of menu cost theory is that in this situation the price level ________, meaning that a recession ________
A) must fall by 4 percent as well, does not occur B) must fall by 4 percent as well, must occur C) still might not fall, may not occur D) still might not fall, may occur
Refer to Table 4.3. After calculating the price elasticity of demand for computers, we can say the demand for computers is:
A. upward sloping. B. inelastic. C. unit elastic. D. elastic.