Multiple Choice
A temporary decrease in taxes leads to
A) a small increase in current consumption.
B) a large increase in current consumption.
C) a small decrease in future consumption.
D) a large decrease in future consumption.
Correct Answer:
Verified
Correct Answer:
Verified
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)
Q50: In the basic two-period model,<br>A) credit markets
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)
Q56: The two primary explanations for the excess