Multiple Choice
A one-unit decrease in current income, and a one-unit increase in lifetime wealth
A) both have no effect on the consumer's behaviour.
B) will both have the same effect on savings.
C) imply that future consumption goes down.
D) have the same effect on the consumer's current and future consumption.
E) have different effects on the consumer's current and future consumption.
Correct Answer:
Verified
Correct Answer:
Verified
Q43: A consumer is a lender if<br>A)the consumer's
Q44: A permanent decrease in taxes leads to<br>A)no
Q45: Distorting taxes can invalidate Ricardian equivalence because<br>A)the
Q46: Bonds are assumed to trade directly<br>A)through financial
Q47: The optimal consumption bundle is where<br>A)the marginal
Q49: When different consumers pay different amounts of
Q50: Ricardian equivalence suggests that the government must
Q51: An important reason why Ricardian equivalence may
Q52: For a lender, an increase in the
Q53: Aggregate consumption is<br>A)more variable than savings.<br>B)more volatile