We use a two-period model because
A) the business cycle has two phases: contraction and recovery.
B) it is the simplest dynamic model.
C) we want to make a distinction between young and old households.
D) this is the horizon of the politicians that formulate policy.
Correct Answer:
Verified
Q6: Intertemporal decisions involve economic decisions
A) made within
Q7: If we represents a two-period consumer's lifetime
Q8: The endowment point is the consumption bundle
Q9: A one-period bond is a promise to
Q10: If we represents a two-period consumer's lifetime
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)
Q16: In the basic two-period model,
A) credit markets
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents