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.
B
You might also like to view...
The main goal of the Clayton Act was to
A. make restraint of trade illegal. B. limit mergers and price-fixing contracts. C. limit competition among small firms. D. make deceptive practices illegal.
Describe how the real interest rate changes in a Keynesian model if a shock shifts the IS curve down and to the right and the Fed changes its policy to keep output unchanged
What will be an ideal response?
Which of the following is most likely to be over consumed?
A. Sparkling water B. Tap water C. Bottled water D. Free water
Congress just received a report that the economy began a downturn five months ago. They vote to implement an expansionary policy to address it, but they are already five months too late to completely stop the damage. This is an example of ______.
a. an impact lad b. a crowding-out lag c. a recognition lag d. an implementation lag