Multiple Choice
The fact that consumption exhibits "excess sensitivity" implies that consumption
A) responds too strongly to predictable changes in income
B) responds too little to predictable changes in income
C) responds too little to surprise changes in income
D) is never affected by liquidity constraints
E) never behaves as Keynes predicted
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
Q5: The random-walk theory of consumption predicts that<br>A)the
Q6: The life-cycle theory of consumption implies 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