When the borrowing constraint is binding, ________
A) wealth is zero
B) current consumption is lower than future consumption
C) future consumption is lower than current consumption
D) consumption smoothing is not possible
D
You might also like to view...
A single-price monopoly has a marginal revenue curve that is
A) horizontal and equal to price. B) downward sloping and lies below the demand curve. C) upward sloping and is the same as its supply curve. D) downward sloping and lies above the demand curve. E) vertical at the profit-maximizing quantity.
Assume that an economy is in equilibrium when the arrival of immigrants causes an increase in the supply of labor
Once the economy has adjusted to its new equilibrium, and assuming that the supply of capital remains unchanged, which of the following has decreased? A) the share of capital income in national income B) the share of labor income in national income C) national income D) the rental price of capital E) none of the above