For a Competitive Equilibrium in a Two-Period Model,which of the Following

question 51

Multiple Choice

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.

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Definitions:

Iconic Memory

The sensory register that briefly holds mental representations of visual stimuli.

Long-term Potentiation

A lasting enhancement in signal transmission between two neurons that results from stimulating them simultaneously, believed to be a cellular mechanism underlying learning and memory.

Neurotransmitters

Chemical substances involved in the transmission of neural impulses from one neuron to another.

Glutamate

A major neurotransmitter in the nervous system that plays key roles in brain development, learning, and memory.