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
Q11: We use a two-period model because
A) the
Q12: If we represents a two-period consumer's lifetime
Q13: The simplest device to analyze dynamic decisions
Q14: The desire to smooth consumption is reflected
Q15: The consumer's lifetime budget constraint states that
A)
Q17: Lifetime wealth is
A) the quantity of assets
Q18: Why don't consumers work in the two-period
Q19: Consumption smoothing refers to
A) the tendency of
Q20: The endowment point is the consumption bundle
Q21: If current income increases as much as
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