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1. Which of the following variables represents first period household consumption? а. b. a2 с. С1 d. 2 3. If the household can borrow and lend, an increase in causes which of the following to decrease? а. b. С2 a2 с. d. all of the above 4. If the household is credit-constrained, an increase in 2 causes which of the following to increase? а. b. С2 a2 с. d. none of the above 5. Suppose a household can borrow and lend in a perfectly competitive credit market. Assume = 0.2 and '2 = 0.10. The value for the optimal choice of "2 when 1 = 10 and 2 = 0 is а. 1.67

1. Which of the following variables represents first period household consumption? а. b. a2 с. С1 d. 2 3. If the household can borrow and lend, an increase in causes which of the following to decrease? а. b. С2 a2 с. d. all of the above 4. If the household is credit-constrained, an increase in 2 causes which of the following to increase? а. b. С2 a2 с. d. none of the above 5. Suppose a household can borrow and lend in a perfectly competitive credit market. Assume = 0.2 and '2 = 0.10. The value for the optimal choice of "2 when 1 = 10 and 2 = 0 is а. 1.67

ECON MACRO
ECON MACRO
5th Edition
ISBN:9781337000529
Author:William A. McEachern
Publisher:William A. McEachern
Chapter6: Tracking The U.s. Economy
Section: Chapter Questions
Problem 1.3P
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1. Which of the following variables represents first period household consumption? а. b. a2 с. С1 d. 2 3. If the household can borrow and lend, an increase in causes which of the following to decrease? а. b. С2 a2 с. d. all of the above 4. If the household is credit-constrained, an increase in 2 causes which of the following to increase? а. b. С2 с. a2 d. none of the above 5. Suppose a household can borrow and lend in a perfectly competitive credit market. Assume = 0.2 and '2 = 0.10. The value for the optimal choice of "2 when1 = 10 and 2 = 0 is а. 1.67 b. 0.00 с. -5.9 d. -7.58
Transcribed Image Text:1. Which of the following variables represents first period household consumption? а. b. a2 с. С1 d. 2 3. If the household can borrow and lend, an increase in causes which of the following to decrease? а. b. С2 a2 с. d. all of the above 4. If the household is credit-constrained, an increase in 2 causes which of the following to increase? а. b. С2 с. a2 d. none of the above 5. Suppose a household can borrow and lend in a perfectly competitive credit market. Assume = 0.2 and '2 = 0.10. The value for the optimal choice of "2 when1 = 10 and 2 = 0 is а. 1.67 b. 0.00 с. -5.9 d. -7.58
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