If current and future consumption are both normal goods, a decrease in the interest rate will necessarily A. cause savers to save more. B. cause borrowers to borrow less. C. reduce everyone’s current consumption. D. make everyone worse off. E. None of the above.

Question 4 Explain how does a decrease in the current income y affect the consumer's consumption-saving decision. In particular, explain: 1) How will current consumption c, future consumption c', and savings s change; 2) Are there any substitution effect or income effect. Make sure you draw two figures, one for the borrowers and one for the lenders.

which of the following occurs when disposable income is zero? Select one: a. consumption is negative b. consumption must be zero c. none of the given options d. saving must be zero

The figure below depicts a typical individual's income and consumption paths over his or her lifetime. Use the list on the right to label the diagram. me consumption www Later Income path 8 Borrowing region c) Consumption path D) Dissaving region Saving region

The saving schedule is drawn on the assumption that as income increases, Select one: a. saving will increase absolutely but decline as a percentage of income. b. saving will decline absolutely and as a percentage of income. c. saving will increase absolutely and as a percentage of income. d. saving will increase absolutely but remain constant as a percentage of income.

Assume Marco is initially borrowing and investing 100, with a return on investment of 50% and an interest rate on borrowing at 10%.  The return on investment falls to 5%. Which statements are correct?   Select one or more: A. Marco’s decision to continue to invest will depend on his preference between consumption today and consumption in the future. B. Marco will wish to invest and borrow, but he will be worse off than when the return to investment was 50%. C. If he continues to invest and borrow, the dashed line representing his new frontier will start at 105 on the y axis and be shallower than the solid red line, so he’ll continue to invest and borrow D. In the remaining questions, assume the central bank now cuts interest rates so that the real interest rate falls to zero. Marco will still not wish to invest and borrow. E. If he just invests his money in the bank instead, his frontier will cross the x axis at 100 and be steeper than the frontier if he invests.…

Question 4 Please see attached picture for question. Thank you

If consumers decide to increase saving, then C decreases, r decreases, I increases, and Y:

A reduction in personal income taxes increases Aggregate Demand through   a. an increase in private savings.   b. an increase in investment spending.   c. an increase in personal consumption.   d. an increase in national savings.

If business taxes are reduced and the real interest rate increases: * A. consumption and saving will necessarily increase. B. the level of investment spending might either increase or decrease. C. the level of investment spending will necessarily increase D. the level of investment spending will necessarily decrease