If the Euler Equation Did Not Hold, Then

question 28

Multiple Choice

If the Euler equation did not hold, then:

• A) the real interest rate would be zero
• B) a consumer would not spend all of his or her lifetime wealth
• C) a consumer could move consumption from one period to another and increase lifetime utility
• D) the consumer has spent more than his or her lifetime wealth
• E) None of these answers are correct.

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