I Am Always Indifferent Between a Unit of Consumption Today

question 58

Multiple Choice

I am always indifferent between a unit of consumption today and tomorrow and the interest rate is 5%.

• A)My intertemporal indifference curve is horizontal.
• B)My intertemporal indifference curve is a straight line with slope 21.
• C)I will spend all of my current and future income on consumption today.
• D)I will spend 5% more on consumption today than on consumption tomorrow.
• E)I will spend 5% more on consumption tomorrow than on consumption today.

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Definitions:

Encoding

The process by which information is transformed into a form that can be stored in memory.

Retrieval

The process of accessing and bringing into consciousness information stored in memory.

Shopping List

A list of items to be purchased at a store, often used as a reminder and to organize shopping trips.

Recall

The mental process of retrieving information from the past.