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) distorting taxes and consumers' limited life spans.
D) changes in market prices and distorting taxes.
E) changes in market prices and consumer's limited life spans.
Correct Answer:
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Q30: The marginal rate of substitution of current
Q31: Aggregate consumption is
A)more variable than savings.
B)more volatile
Q32: A one-unit decrease in current income, and
Q33: If people are finite-lived, Ricardian equivalence can
Q34: For a competitive equilibrium in a two-period
Q36: The endowment point is the consumption bundle
Q37: An increase in the real interest rate
A)increases
Q38: In the two-period model of the economy
A)there
Q39: A key variable in intertemporal choice is
A)investment.
B)real
Q40: For all bonds to be indistinguishable
A)all consumers
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