Multiple Choice
The life-cycle theory of consumption implies that
A) the mpc out of wealth is very small
B) the mpc out of permanent income is larger than the mpc out of transitory income
C) a large change in stock values can affect the economy, but the effect is fairly small
D) an individual's mpc out of permanent income changes with age
E) all of the above
Correct Answer:
Verified
Correct Answer:
Verified
Q1: Assume a worker at age 25 with
Q2: If a worker gets a large one-time
Q3: Assume the government announces an income tax
Q4: The fact that consumption exhibits "excess sensitivity"
Q5: The random-walk theory of consumption predicts that<br>A)the
Q7: Liquidity constraints explain<br>A)why consumers may spend less
Q8: According to the permanent-income theory of consumption<br>A)permanent
Q9: The debate about different consumption theories can
Q10: The Barro-Ricardo equivalence proposition<br>A)states that debt-financing merely
Q11: The Barro-Ricardo equivalence proposition implies that tax