In a One-Period Economy,real Consumption

question 36

Multiple Choice

In a one-period economy,real consumption

• A) is always less than disposable income.
• B) is typically greater than disposable income.
• C) is exactly equal to disposable income.
• D) can be greater than, less than, or equal to disposable income.
• E) can be less than savings.

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Definitions:

Call Contract

A financial contract that gives the buyer the right, but not the obligation, to buy a specified amount of an asset at a predetermined price within a specified time period.

Write

In finance, to sell an option contract, effectively creating a new option in the market.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy an asset at a specified price within a specified period.

Premium

The amount paid for an option or insurance policy over its intrinsic value or the amount by which the price of a bond exceeds its face value.