Exam 18: Consumption and Saving

Disposable income represents ________.

Intertemporal Budget Constraint -Referring to the table above, if consumption in period one is zero, then consumption in period two cannot be greater than ________.

The life-cycle hypothesis predicts what consequence of aging of the overall population? [That is, an increase in T, relative to R & L.]

An intertemporal budget constraint ________.

Along any single indifference curve the ________.

If households come to believe that permanent income has not changed ________.

In the Keynesian consumption function, if current income is equal to zero, consumption spending is equal to ________.

Assuming no bequests, with a real interest rate of 10 percent, wealth of $60,000, current income of $70,000, current consumption of $30,000 and future income of $100,000, future consumption equals ________.

The farther an indifference curve lies from the origin ________.

Intertemporal Budget Constraint -Given the table above, the present value of lifetime resources ________ when the real interest rate rises to five percent.

Which of the following is not true of all indifference curves?

For consumers with a binding borrowing constraint, a decrease in the real interest rate ________.

The theory of intertemporal choice was presented by ________.

For the majority of the U.S. population ________.

The substitution effect that occurs when interest rates change involves a change in consumption that develops from ________.

The effect of the February 2008 tax rebate on spending was reduced due to ________.

According to the permanent income hypothesis, consumption spending depends largely on ________.

Gross income net of taxes is known as ________.

The equation MRS = 1 + r means that ________.

The idea that consumers will not consistently discount the future over time is known as ________.