When a person receives an increase in wealth, what is likely to happen to consumption and saving?
A. Consumption decreases and saving decreases.
B. Consumption decreases and saving increases.
C. Consumption increases and saving increases.
D. Consumption increases and saving decreases.
Answer: D
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Signals are believable when the cost of sending a
A) false signal is known to be low. B) false signal is known to be high. C) true or false signal is known to be low. D) true signal is known to be high.
According to research by Richard Sylla and John James on western farm mortgage rates,
a. real rates were lower than rates charged to eastern manufacturers. b. relatively high real rates were due to the monopoly power of eastern financiers. c. relatively high rates reflected high lending risks associated with agricultural loans. d. Farmers' nominal rates were high, but real rates were actually less than those charged for most loans.