If a Consumer Is in a Position in Which a Borrowing

question 96

Multiple Choice

If a consumer is in a position in which a borrowing constraint limits his or her current consumption and a one-time tax is levied on his or her current income, then the tax will:

• A) lower the consumer's future consumption.
• B) not affect the consumer's future consumption.
• C) increase the consumer's future consumption.
• D) have no effect on either current or future consumption.

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Definitions:

Bimodal

Describes a distribution or dataset having two distinct modes or peaks.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how much the values of a dataset differ from the mean of the dataset.

IQR

The interquartile range, a measure of statistical dispersion representing the difference between the 25th and 75th percentiles.

Skewed

A description of data that is not symmetrically distributed, often leaning towards one direction.