As winner of a breakfast cereal competition, you can choose one of the following prizes: a. $100,000 now. b. $180,000 at the end of five years.
c. $19,000 for each of 10 years.
If the interest rate is 12%, which is the most valuable prize?

Which of the following will not cause the consumption schedule to shift? a) a sharp increase in the amount of wealth held by households b) a change in consumer incomes c) the expectation of a recession d) a growing expectation that consumer durables will be in short supply