O'Roberts Receives a Cash Prize of $3,000 and Is Trying

question 41

Multiple Choice

O'Roberts receives a cash prize of $3,000 and is trying to decide how much money to invest at an interest rate of 5% and how much to spend now. Consider his intertemporal budget constraint where future interest income is measured on the vertical axis. If the interest rate were 7% instead, his budget constraint would:

• A) pivot inward so that the horizontal intercept stays the same and the vertical intercept is lower
• B) pivot inward so that the horizontal intercept moves in and the vertical intercept stays the same
• C) pivot outward so that the horizontal intercept stays the same and vertical intercept is higher
• D) pivot outward so that the horizontal intercept moves out and the vertical intercept stays the same

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Definitions:

Diarrhea

A common condition characterized by frequent, loose, or watery stools, significantly more so than the normal bowel movement pattern.

Hypertonic Solution Enema

A type of enema using a solution that has a higher concentration of solutes than the body fluids, often used to draw water out of the colon.

Osmotic Pressure

Pressure exerted by the number of nondiffusable particles in a solution; the amount of pressure needed to stop the flow of water across a membrane.

Sodium Phosphate

An inorganic compound used in various applications, including as a laxative, a food additive, and in dental products.