Multiple Choice
For a competitive equilibrium in a two-period model, which of the following is TRUE?
A) The financial market clears.
B) There must be an equal number of borrowers and lenders.
C) The present value of government spending must be greater than the present value of taxes.
D) Each consumer picks first- and second-period consumption given the real interest rate.
E) All deficits are financed by issuing debt.
Correct Answer:
Verified
Correct Answer:
Verified
Q56: A permanent increase in income leads to<br>A)a
Q57: An increase in second-period income results in<br>A)a
Q58: A key channel for interest rate effects
Q59: The property of diminishing marginal rate of
Q60: In the case where current and future
Q62: In the data, which of the following
Q63: If the government reduces current taxes, government
Q64: If people are finite-lived, Ricardian equivalence can
Q65: A one-period bond is a promise
Q66: The substitution effect of a change in