In the Two-Period Model, a Decrease in the Real Interest

question 8

Multiple Choice

In the two-period model, a decrease in the real interest rate causes the budget constraint to

• A)shift to the left in a parallel fashion.
• B)shift to the right in a parallel fashion.
• C)rotate in a clockwise direction.
• D)rotate in a counterclockwise direction.

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Definitions:

Household Income

The combined gross income of all members of a household, regarded as one economic unit.

Less Schooling

A situation or condition where individuals receive less formal education than the average or expected standard.

Prejudice

Is an attitude that judges a person according to his or her group’s real or imagined characteristics.

Disablism

Discrimination or prejudice against individuals with disabilities, based on the belief that typical abilities are superior.