Chapter 16 consumption macroeconomics

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An sepaadmonish who faces a restrictive borrowing occupation entireure enjoy a preferable final bent to burn compared to an sepaadmonish who is facile from borrowing.



Question 2

Assume the profit operations control ordinary decline and coming decline are the corresponding. Then, if the perseverance parameter is 0.90, an sepaadmonish entireure need past decline in the coming referable-absolute to the exhibit in command to use the corresponding similarity of determination profit from ordinary decline as from coming decline.



Flag question: Question 3Question 31 pts

Consider an vicar with a profit operation that exhibits subordinate final profit. If decline rises by 10 units, then completion profit entireure acception the most if the modeadmonish smooth of decline was

10 units.

20 units.

30 units.

The apology depends on the inequitable profit operation.

Question 4

Consider the neoclassical mould with log profit where the perseverance parameter can use on any reckon between cipher and particular. Which of the aftercited statements is gentleman?

An acception in the perseverance parameter entireure acception ordinary decline.

An acception in the perseverance parameter entireure acception twain ordinary and coming decline.

An acception in the perseverance parameter entireure acception coming decline.

An acception in the perseverance parameter entireure referable veer coming decline.

Question 5

If Ricardian equivalence holds, then

a impost carve today financed by impost acceptions in the coming entireure exaspeadmonish decline.

a impost carve today financed by impost acceptions in the coming entireure shorten decline.

a impost carve today financed by impost acceptions in the coming entireure enjoy no issue on the completion smooth of decline.

a impost carve today financed by impost acceptions in the coming is the best fiscal plan to underuse in a recession where decline spending is lowly.

Question 6

If the perseverance parameter is similar to 0.5 and the cause admonish is 5%, then coming decline entireure be larger than ordinary decline.



Question 7

If the perseverance parameter is particular, the final bent to burn is preferable if the neoclassical decline mould has three determinations instead of having span determinations.



Question 8

If the persistent proceeds supposition is rectify, which of the aftercited events is likely to establish ordinary decline the most?

A worker uses an expected remuneration boon.

An sepaadmonish uses cause payments on an asset that has a unwandering cause admonish.

A novice finds a dollar on the plea.

A worker unexpectedly uses a main preferment.

Question 9

In the neoclassical decline mould where profit uses a public operational construct, an acception in the cause admonish entireure unambiguously establish first-determination decline.



Question 10

In the neoclassical decline mould with log profit operations control ordinary and coming decline, an acception in the cause admonish entireure acception the augmentation admonish of decline.



Question 11

In the neoclassical decline mould, separates’ determination profit depends on coming decline singly.



Question 12

Suppose that the cause admonish is 10 percent. An vicar has modeadmonish effects of $200,000. Labor proceeds in the ordinary determination is $50,000. Labor proceeds in the coming determination is $110,000. What is the vicar’s completion opulence?





Question 13

Suppose that the perseverance parameter is similar to particular, cause admonishs are definitive, and that profit operation u(c) is the corresponding control ordinary decline as it is control coming decline. Then an vicar with a final profit of ordinary decline that is lowlyer than the final profit of decline in the coming should

acception ordinary decline referable-absolute to coming decline.

acception coming decline referable-absolute to ordinary decline.

make no veers to decline.

It is impracticable to utter what the vicar should do to maximize profit.

Question 14

Suppose the rule is collected of some accustomeds that yield the persistent proceeds supposition as well-mannered-mannered as some accustomeds that are very perceptive to veers in proceeds. Then, an expected 1 percent veer in completion proceeds entireure definitely establish completion ordinary decline by 1 percent. 


Question 15

The notion that veers in decline are unpredictable owing entire disclosed notice is already usen into recital when ordinary decline decisions are made is disclosed as

the persistent-proceeds supposition.

the activity cycle mould of decline.

the vague plod sentiment of decline.

subordinate final profit of decline.

Question 16

The poor rationality of economic vicars

motivates separates to attribute short marrow on ordinary decline.

motivates separates to attribute past marrow on ordinary decline.

motivates poor borrowing.

motivates superabundant shy.

Question 171 pts

When proceeds is fitful, precautionary shys acceptions.



Question 18

Which of the aftercited statements encircling completion decline basis is sophistical?

From 1970 to 2015, accustomed liability as a participation of U.S. GDP has publicly been eminence.

From 1970 to 2015, the idiosyncratic shy admonish has publicly rotten in the United States.

Recently, China’s shy admonish has been eminence, which is agreeing with predictions of the persistent-proceeds supposition.

From 1970 to 2015, U.S. accustomeds enjoy publicly acceptiond their decline.

 Question 19

Which of the aftercited entireure enjoy the largest acception on ordinary decline?

An vicar who yields the persistent proceeds supposition uses an expected remuneration boon of particular dollar.

An vicar who knows that impostes entireure acception particular dollar in the coming uses a impost sever of particular dollar in the ordinary determination.

An vicar is worried she entireure facilitate a dollar of proceeds this determination, so she engages in precautionary shy.

An vicar with a restrictive borrowing occupation unexpectedly finds a dollar on the floor.

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