An individual's wealth constraint is determined by
a. the individual's level of education
b. the facts that wealth is given and so she must give up one kind of wealth in order to acquire another
c. overall conditions in the economy
d. the amount of wealth the individual chooses to hold in the form of money
e. the value of corporate stock
B
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Discuss the correct and incorrect economic analysis in the following statement
"If good weather in Hawaii creates a bumper crop of pineapples, the supply of pineapples will increase. This will result in a price decrease, which will then cause the supply of pineapples to decrease."
Assume that the central bank purchases government securities in the open market. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and real GDP in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls, and real GDP rises. b. The real risk-free interest rate rises, and real GDP remains the same. c. The real risk-free interest rate falls, and real GDP remains the same. d. The real risk-free interest rate and real GDP remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.