Examlex
You receive $500 today which you plan to save for two years.Also,in two years you will be given another $500.If the interest rate is 5 percent,what is the present value of the payment of $500 today and the $500 in two years?
Substitution Effect
The change in consumption patterns due to a change in the prices of goods, leading consumers to replace more expensive items with cheaper alternatives.
Income Effect
The change in an individual's or economy's income and how that change will affect the quantity demanded of a good or service.
Opportunity Cost
The lost potential gain from other alternatives when one alternative is chosen.
Income Effects
The changes in an individual's or economy's income and how that changes their spending and saving behavior.
Q13: Consider three different closed economies with the
Q17: One way to characterize the difference between
Q24: Morgan,a financial advisor,has told her clients the
Q24: Other things the same,when the interest rate
Q27: For a closed economy,GDP is $18 trillion,consumption
Q36: You observe a closed economy that has
Q38: A mutual fund<br>A)is a financial institution that
Q120: A larger budget surplus<br>A)raises the interest rate
Q151: At some point during the financial crisis
Q163: Which of the following is not a