Lack of Evidence of a Pattern of International Consumption Smoothing

question 4

Multiple Choice

Lack of evidence of a pattern of international consumption smoothing is best explained by

• A) government policies to fight trade deficits.
• B) failure of consumers in less advanced economies to act rational.
• C) a tendency for business cycles to be a worldwide phenomenon.
• D) Ricardian equivalence.
• E) very different levels of aggregate economic activity.

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Definitions:

Materially

In a significant or substantial manner, especially in a way that affects a contract or legal decision.

Bailment

A legal relationship where physical possession of personal property is transferred from one person to another with the understanding that the property will be returned.

Sale

A contract in which ownership of goods is transferred by the seller to the buyer for a price.

Title

Legal ownership of property, especially real estate or automobiles.