For a competitive equilibrium in a two-period model, which of the following is TRUE?
A) The financial market clears.
B) There must be an equal number of borrowers and lenders.
C) The present value of government spending must be greater than the present value of taxes.
D) Each consumer picks first- and second-period consumption given the real interest rate.
E) All deficits are financed by issuing debt.
Correct Answer:
Verified
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A)more variable than savings.
B)more volatile
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A)increases
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A)there
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A)investment.
B)real
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