If households come to believe that permanent income has not changed ________
A) the impact of a change in taxes on spending will be limited
B) they will consume on the basis of their current income
C) their life-cycle will be affected
D) the impact of a given change in taxes on spending will be enhanced
A
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Suppose the demand for widgets is given by QD = 100 - 5p - pd + 2Y, where Y is average consumer income, p is the price of lemons, and pd is the price of doodads. According to this equation, widgets are an inferior good
Indicate whether the statement is true or false
The annual rental rate for a machine is
a. the yearly depreciation and maintenance costs for the machine. b. the yearly interest costs associated with owning the machine. c. the initial purchase price of the machine divided by the number of years the machine is expected to last. d. the sum of the yearly depreciation, maintenance, and interest costs associated with owning the machine.