The intertemporal budget constraint tells us that
A) the income earned in a lifetime will be evenly divided between consumption and saving.
B) the present value of lifetime consumption equals the present value of lifetime income.
C) household consumption is based on permanent income and not transitory income.
D) consumption smoothing only occurs in years when income is greater than consumption.
B
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In the market for used cars, if there is asymmetric information yet all cars sell for the same price
A) there is an efficiency problem and there are equity implications. B) there is no efficiency problem, but there are equity implications. C) buyers of lemons win at the expense of buyers of good cars. D) there is no efficiency problem and there are no equity implications.
A counterfactual is
A. what happens when there are no facts. B. what would have happened if the treatment group had not received the treatment. C. a legal term describing the process of proving that a negative is the actual truth. D. none of these answer options are correct.
If the supply curve is perfectly inelastic and the demand curve is a downward sloping straight line, what is the effect of a consumer ad valorem tax on equilibrium price and quantity?
A) Price remains unchanged and quantity increases. B) Price decreases and quantity increases. C) Price decreases and quantity remains unchanged. D) Price and quantity decrease.
Studies have shown links between calcium consumption and a reduction in osteoporosis. How does this affect the market for calcium?
A) The calcium supply curve shifts to the right because of a change in tastes in favor of calcium. B) The calcium demand curve shifts to the right because of a change in tastes in favor of calcium. C) The calcium demand curve shifts to the left because this new information will increase the price of calcium. D) The calcium supply curve shifts to the left because this new information will increase the price of calcium.