Question
1. Short Answers This part contains four (4) questions. Note that merely saying true or false will not be sufficient. You must EXPLAIN WHY the
1. Short Answers
This part contains four (4) questions. Note that merely saying true or false will not be sufficient. You must EXPLAIN WHY the italicized statement is true, false, or uncertain.
1.True, False or Uncertain, Explain:
If there is an increase in current taxes and a decrease in future taxes for a representative consumer, then the consumer's endowment point remains unchanged, although his lifetime budget constraint would shift.
2.True, False or Uncertain. Explain:
Regardless of whether one uses the real business cycle, coordination failure or the New Keynesian models, money is always neutral at the zero-lower bound.
3.True, False or Uncertain. Explain:
Regardless of whether there is physical currency or money is only in the form of electronic means of payment, there is always an effective lower bound for nominal interest rates below which monetary policy becomes ineffective.
4.True, False or Uncertain. Explain:
If for sure the taxpayers and consumers of today are the same taxpayers and consumers of tomorrow, then the Ricardian Equivalence holds in all other circumstances.
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