Michael faces tradeoffs between consuming in the current period when he is young and consuming in a future period when he is old. Michael experiences a decrease in the current interest rate he earns on his savings. Michael will save
a. less in the current period if the substitution effect is greater than the income effect.
b. less in the current period if the income effect is greater than the substitution effect.
c. more in the current period if the substitution effect is greater than the income effect.
d. more in the current period, regardless of the sizes of the income and substitution effects.
a
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Aggregate supply
A) is the overall wealth within an economy. B) is the total of all planned production in an economy. C) is the total amount of raw materials available in an economy. D) is the total amount of money circulating in an economy.
If you have private information that you are a safer driver than your record indicates, you are likely to buy an insurance policy with
A) a higher than average deductible. B) a positive but lower than average deductible. C) an average deductible. D) no deductible.