If Nonmarket Work Is a Normal Good, Then an Increase

question 140

Multiple Choice

If nonmarket work is a normal good, then an increase in income __________ the time allocated to __________.

• A)decreases; market work
• B)decreases; leisure
• C)increases; market work
• D)increases; leisure
• E)increases; nonmarket work

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Definitions:

Forward Rates

Interest rates or exchange rates fixed now for financial transactions that will occur at a future date.

Home Currency Approach

A method of assessing an international investment by converting all foreign currencies involved into the investor’s domestic or "home" currency.

Spot Rate

The ongoing market rate at which a certain currency is available for buying or selling for immediate dispatch.

Unbiased Forward Rate

Theoretically, a forward rate in the currencies market that is equal to the spot rate adjusted for interest rate differentials, without any prediction of future direction.