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26 Feb 2019

Assume that consumption when young and consumption when old are both normal goods. The income effect of an increase in the interest rate will result in:

a.
a decrease in saving when young.

b.
a decrease in saving when old.

c.
an increase in saving when old.

d.
an increase in saving when young.

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62) After the household has adjusted its private saving behaviour to take into account the public pension plan as described in 61), then compared to its original level of saving and welfare, A) saving will decrease and the household will be better off. B) saving will decrease and the household will be no better or worse off. C) saving will decrease and the household will be worse off. D) saving may increase or decrease and the household may be better off or may be worse off. E) saving may increase or decrease and the household will be better off.

64) After the household has adjusted its private saving behaviour to take into account the new tax system as described in 63), then compared to its original level of saving and welfare, A) saving will decrease and the household will be better off. B) saving will decrease and the household will be no better or worse off. C) saving will decrease and the household will be worse off. D) saving may increase or decrease and the household may be better off or may be worse off. E) saving may increase or decrease and the household will be better off.

1. A decrease in investment spending that results from an increase in government borrowing is called

a.) a deficit

b.) a surplus

c.) a liability

d.) crowding out

2. In a closed economy:

a.) national saving equals net worth

b.) there are no taxes

c.) there is no interaction with other countries

d.) there is no government

3. If we calculate income minus taxes minus consumption, then we are left with:

a.) national saving

b.) investment

c.) public saving

d.) private saving

4. In the financial market, ____ are supplying the funds and ____ are demanding the funds.

a.) governments: people

b.) foreigners: banks

c.) borrowers: savers

d.) savers: borrowers

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Assume that consumption when young and consumption when old are both normal goods. The income effect of an increase in the interest rate will result in:

a.
a decrease in saving when young.

b.
a decrease in saving when old.

c.
an increase in saving when old.

d.
an increase in saving when young.

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Principles of Economics

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	a.	a decrease in saving when young.
	b.	a decrease in saving when old.
	c.	an increase in saving when old.
	d.	an increase in saving when young.

Assume that consumption when young and consumption when old are both normal goods. The income effect of an increase in the interest rate will result in: a. a decrease in saving when young. b. a decrease in saving when old. c. an increase in saving when old. d. an increase in saving when young.

Unlock all answers

Related textbook solutions

Principles of Economics

Principles of Macroeconomics

Principles of Microeconomics

Related questions

Weekly leaderboard

Assume that consumption when young and consumption when old are both normal goods. The income effect of an increase in the interest rate will result in:

a.
a decrease in saving when young.

b.
a decrease in saving when old.

c.
an increase in saving when old.

d.
an increase in saving when young.