1.

In the asymmetric information model from class where there is a fraction "a" of "good" borrowers that do not default on their debts, higher default rates imply market efficiency and a measured marginal propensity to consume (mpc) O Lower; lower O Lower; higher O Higher; higher O Higher; lowerConsider the Chapter 9 inter-temporal model from class with perfect information: If real interest rates increase then the present value of lifetime disposable income goes _ and the future value of lifetime disposable income goes .3. Down; up .3. Down; down {3. Up;up .f'j. Up; down Borrowers that intend to default on their debts would prefer to borrow in a market with No lending O Collateralized borrowing O Asymmetric information Perfect informationAccording to the language and theory from class, a temporary tax cut (balanced by a future tax increase) will most likely have_ if the marginal propensity to consume (mpc) is equal to zero O A bigger impact on Aggregate Consumption No impact on Aggregate Consumption A smaller impact on Aggregate Consumption