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How do economists define income?
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- Raj has MUx = 4Y and MUy = X, the price of X is 2, the price of Y is 3, and an income of 60. Find the amount of x and y Raj will consume.An article in the Wall Street Journal on the housing market states that "Steady job growth, rising wages and low interest rates have helped prop up housing demand." Source: Steven Russolillo, "Why the Housing Market is Getting Stronger," Wall Street Journal, May 22, 2016. Why do low interest rates increase the demand for housing? O A. The lower the interest rate, the less expensive it is for households to borrow money. O B. The lower the interest rate, the lower the price that sellers are willing to accept for their home. O C. When interest rates are low, the supply of housing increases. O D. Lower interest rates induce consumers to save more money for future home purchases. In the official government National Income and Product Accounts (NIPA), what component of investment includes purchases of new houses? O A. "Actual investment" OB. "Inventories" OC. "Plant and equipment" O D. "Residential"A short article in the January 10, 2011 edition of The New York Times discussed the amount spent on DVDs over the past six years: (In 2004) consumers spent about $21.8billion to rent and and buy DVDs, Blu-ray discs, digital downloads and other forms of home entertainment...The number has fallen every year since, for a total drop of about 13.8 percent, to $18.8 billion in 2010. The reporter noted that the actual drop was about double what it seemed to be when the figures were adjusted for inflation: $21.8 billion figure from 2004 would amount to $25.3billion in current dollars. The article also noted that box office revenues rose from $9.3billion in 2004 to $10.6 billion in 2010. Calculate the percentage increase in box office revenues, then re-calculate the percentage increase using inflation-adjusted dollars. Have box office revenues increased or decreased over this six-year time period?