In the open-economy macroeconomic model, the supply of loanable funds comes from

The price paid to purchase land

A) has no relation to cost because it did not cost anything to produce the land. B) rarely has any relation to cost because it has usually been determined by competitive bidding. C) usually depends on the cost to the seller of letting the purchaser have the land. D) would more accurately reflect the social value of the land if the price were zero.

Suppose consumers anticipate that their wealth will grow over time, because of interest earnings and capital gains. According to the life-cycle hypothesis, such optimism should cause current consumption to be ________

A) relatively low B) relatively insensitive to changes in income C) rising as individuals near retirement age D) relatively high