Consider the Budget Constraint Between "Spending Today" on the Horizontal

question 279

Multiple Choice

Consider the budget constraint between "spending today" on the horizontal axis and "spending a year from today" on the vertical axis. Suppose that you have $100 today and expect to receive $100 one year from today. Your money market account pays an annual interest rate of 25%, and you may borrow money at that interest rate. Suppose now that the interest rate increases to 40%. What happens to the slope of your budget constraint relative to when the interest rate was 25%? The slope

• A)becomes steeper.
• B)becomes flatter.
• C)doesn't change because the budget constraint shifts in parallel to the original budget constraint.
• D)doesn't change because the budget constraint shifts out parallel to the original budget constraint.

Recognize the use and importance of Likert-type scales and semantic differential scales.

Distinguish between proprietary and open-access measurement instruments.

Identify types of reliability and what they measure.

Understand the importance of clear definitions and classifications for observer reliability.

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Definitions:

Buyers

Individuals or entities that purchase goods or services in a market.

Price

The sum of money needed to buy a product or service.

Movement Along

Refers to changes in the quantity demanded or supplied of a good in response to price changes, moving along a demand or supply curve.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded by consumers, normally sloping downwards from left to right.