The Income Effect of an Increase in the Interest Rate

question 64

Multiple Choice

The income effect of an increase in the interest rate (when "Consumption when young" and "Consumption when old" are both normal goods) will result in

• A)an increase in saving when young.
• B)an increase in saving when old.
• C)a decrease in saving when young.
• D)a decrease in saving when old.

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Definitions:

Inclusive Unions

Labor unions that aim to represent a broad spectrum of workers, regardless of occupation, industry, or demographic characteristics.

Exclusive Unions

Labor unions that require all employees in a bargaining unit to become members of the union as a condition of employment.

Above-equilibrium

A market condition where the price of a good is set higher than the equilibrium price, leading to a surplus of the good.

Independent Unions

U.S. unions that are not affiliated with the AFL-CIO or Change to Win.