For a competitive equilibrium in a two-period model, which of the following is true?
A) each consumer picks first- and second-period consumption given the real interest rate
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) the financial market clears
E) all deficits are financed by issuing debt
Correct Answer:
Verified
Q42: If the government reduces current taxes, government
Q43: In a two-period model, government spending is
Q44: Ricardian equivalence suggests that the government must
Q45: For a competitive equilibrium in a two-period
Q46: The private supply of credit is an
Q48: The Ricardian Equivalence Theorem implies that a
Q49: The government's future period budget constraint is
A)
Q50: An increase in the real interest
A) increases
Q51: The government's present value budget constraint states
Q52: If government spending is held constant and
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