If the real interest rate falls, people decide to ________ because the opportunity cost of ________
A) decrease their consumption expenditure; consumption has decreased
B) increase their consumption expenditure; consumption has decreased
C) increase their consumption expenditure; saving has decreased
D) save more; saving has decreased
E) None of the above answers is correct.
B
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Credit risk is the risk that
A) an insufficient number of borrowers will apply for loans or credit. B) interest rates will rise after a loan has been granted. C) interest rates will fall after a loan has been granted. D) borrowers might default on their loans.
The above figure shows a consumer's indifference curves for soda and all other goods. Assuming a budget of $100, derive the consumer's demand for soda for prices of $4 and $10 per case of soda. Estimate the price elasticity of demand for soda
What will be an ideal response?