Multiple Choice
The two primary explanations for the excess volatility of consumption are
A) consumers' limited life spans and credit market imperfections.
B) credit market imperfections and changes in market prices.
C) changes in market prices and distorting taxes.
D) distorting taxes and consumers' limited life spans.
Correct Answer:
Verified
Correct Answer:
Verified
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)
Q57: An increase in the real interest rate
Q58: Consumption smoothing refers to<br>A) the tendency of
Q59: The simplest device to analyze dynamic decisions
Q60: We assume that the representative consumer's preferences
Q61: Intertemporal decisions involve economic decisions<br>A) made within