The demand curve shifts rightward from D0 to D1 when the U.S. interest rate ________ and foreign interest rates are unchanged. The demand curve shifts rightward from D0 to D1 when the expected future exchange rate ________
A) falls; rises
B) rises; rises
C) falls; falls
D) rises; falls
E) None of the above answers is correct because the factors mentioned lead to movements along the demand curve and not to shifts of the demand curve.
B
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Mortgages with variable interest rates: a. increase the risk of expected inflation to creditors. b. increase economic efficiency. c. are offered at interest rates that can be adjusted to changes in inflation over time. d. make borrowers worse off when inflation increases
e. shift the risk of unexpected inflation from the borrower to the lender.
If the price of train rides is 1 and the price of food is 10, and the MRS of food for train rides expressed by Karl is 5, is Karl a utility maximizer? How do you know? If Karl is not maximizing, what should he do to improve his situation?
What will be an ideal response?