Ci and Yi are consumption and income at period i (i=1, 2). When the world interest rate is r (100xr%), C2= agent has the utility function U=C1C2. In an autarky economy, when Y1=100 and Y2=132, the level of the utility is with r=0.1, the level is compared to C1 with r=0.1. Choose the reason for this change. OC1 becomes cheaper. OC2 becomes cheaper. Opportunity cost of interest rate becomes smaller. When the interest rate rises by 0.1, C2 changes by ◆ A representative In an open economy compared to C2 with r=0.1. C1 changes by

Ci and Yi are consumption and income at period i (i=1, 2). When the world interest rate is r (100xr%), C2= agent has the utility function U=C1C2. In an autarky economy, when Y1=100 and Y2=132, the level of the utility is with r=0.1, the level is compared to C1 with r=0.1. Choose the reason for this change. OC1 becomes cheaper. OC2 becomes cheaper. Opportunity cost of interest rate becomes smaller. When the interest rate rises by 0.1, C2 changes by ◆ A representative In an open economy compared to C2 with r=0.1. C1 changes by

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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