An increase in real interest rates will ________ current consumption for households who are lenders and will ________ current consumption for households who are borrowers
A) increase; decrease
B) decrease; increase
C) have an unclear effect on; decrease
D) decrease; have an unclear effect on
C
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Which of the following is a characteristic of an institution?
A) The institutions of a nation are permanent and cannot be changed over time. B) Institutions place constraints on the behavior of economic agents. C) Institutions are determined by individual opinions without considering the government's preference. D) Institutions have very little influence on a nation's economic prosperity.
Consider two individuals, Celia and Sondra, who produce bracelets and pendants. Celia's and Sondra's hourly productivity are as follows:
Bracelets /hour Pendants /hour Celia 4 1 Sondra 10 2 Who has the absolute advantage or comparative advantage in the production of bracelets or pendants?