Multiple Choice
In the basic two-period model,
A) credit markets have frictions.
B) the government borrows at a lower interest rate than do consumers.
C) some consumers will always default on their debts.
D) consumers do not default on their debts.
Correct Answer:
Verified
Correct Answer:
Verified
Q45: In the data,which of the following is
Q46: A permanent increase in income leads to<br>A)
Q47: The government's present value budget constraint states
Q48: Savings in our model are<br>A) durable consumption.<br>B)
Q49: If the interest rate increases,lifetime wealth (we)<br>A)
Q51: A temporary decrease in taxes leads to<br>A)
Q52: An increase in second-period income results in<br>A)
Q53: With higher future taxes<br>A) current consumption declines.<br>B)
Q54: For a competitive equilibrium in a two-period
Q55: Distorting taxes can invalidate Ricardian equivalence because<br>A)