Explain why changes in consumption are unpredictable if consumers obey the permanent-income hypothesis and have rational expectations.
Question:
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 63% (11 reviews)
The permanentincome hypothesis implies that consumers try to smooth consump...View the full answer
Answered By
Mamba Dedan
I am a computer scientist specializing in database management, OS, networking, and software development. I have a knack for database work, Operating systems, networking, and programming, I can give you the best solution on this without any hesitation. I have a knack in software development with key skills in UML diagrams, storyboarding, code development, software testing and implementation on several platforms.
4.90+
63+ Reviews
152+ Question Solved
Related Book For
Macroeconomics
ISBN: 978-1464168505
5th Canadian Edition
Authors: N. Gregory Mankiw, William M. Scarth
Question Posted:
Students also viewed these Economics questions
-
Explain why changes in value stream profitability may be better information than individual product cost for certain decisions.
-
The first case at the end of this chapter and each of the remaining chapters is a series of integrative cases involving Starbucks. The series of cases applies the concepts and analytical tools...
-
1. Investment is a larger component of GDP than consumption, but it is much more volatile. _____ (True/False) 2. Investment spending is very_______, since it moves in conjunction with GDP. 3. The...
-
Two positive charges, each with charge q = 2.5 nC, are placed as shown in the diagram. The distance d 0.42 m. Find the net electric potential at the point x = 0, y = 0.12 m.
-
The file P08_05.xlsx contains salary data on all NFL players in each of the years 2002 to 2009. Because this file contains all players for each of these years, you can calculate the population mean...
-
A mass hanging from a spring oscillates with a period of 0.35 s. Suppose the mass and spring are swung in a horizontal circle, with the free end of the spring at the pivot. What rotation frequency,...
-
A cylinder with a diameter \(D\) floats upright in a liquid as shown in Fig. P7.18. When the cylinder is displaced slightly along its vertical axis it will oscillate about its equilibrium position...
-
Stagnant Iron and Steel currently pays a $12.25 annual cash dividend (D0). They plan to maintain the dividend at this level for the foreseeable future as no future growth is anticipated. If the...
-
Criminalization of Exposure to HIV Infection Ethics Issue: Should people living with HIV be subject to imprisonment or other criminal penalties for: Engaging in voluntary, consensual protected sexual...
-
Mountain Maples is a mail-order nursery dedicated to growing, selling, and shipping beautiful Japanese Maple trees. Located on a ridge-top in Mendocino County, Northern California, Mountain Maples...
-
Use Fishers model of consumption to analyze an increase in second-period income. Compare the case in which the consumer faces a binding borrowing constraint and the case in which he does not.
-
Give an example in which someone might exhibit time-inconsistent preferences.
-
A UK company which accounts in sterling () was set up in January 2009 and raised 400,000 by issuing shares. It purchased goods for resale from Italy in February 2009 for EUR 400,000, when the...
-
Watch this Honda video and answer the following questions: https://youtu.be/D1qpd-mwuaQ 1. What do you think this ad is trying to convey? Provide specific examples from the ad. 2. If you were...
-
Instructions : Write a 300 to 500 word response for one ( 1 ) of the three topics below : 1. How are moral ideals defined and understood in contemporary society ( i.e. are they absolutes , hard fast...
-
The following information concerning inventories for Seabring Company is available: Beginning work-in-process inventory = $54,000 Ending work-in-process inventory = $70,000 Beginning finished goods...
-
Write a letter to Zeta Phi Beta sorority members stating. I just graduated from wayne State university with a BA degree and I am interested in joining the Zeta Phi Beta sorority.
-
Ebbs Products, Incorporated, has a Motor Division that manufactures and sells a number of products, including a standard motor. Data concerning that motor appear below: Capacity in units 86,000...
-
Quite some time ago, Frank Lloyd Wright designed a one-mile-high building. Suppose that, in such a building, steam for the heating system enters a pipe at ground level as dry, saturated vapor at 200...
-
Determine which of the following limits exist. Compute the limits that exist. lim x-0 1- + 3x X
-
Parvez, a pharmacology student, has allocated $120 per month to spend on paperback novels and used CDs. Novels cost $8 each; CDs cost $6 each. Draw his budget line. a. Draw and label a second budget...
-
Now go back to the original assumptions of problem 1 (novels cost $8, CDs cost $6, and income is $120). Suppose that Parvez is spending $120 monthly on paperback novels and used CDs. For novels,...
-
Anita consumes both pizza and Pepsi. The following tables show the amount of utility she obtains from different amounts of these two goods: Suppose Pepsi costs $0.50 per can, pizza costs $1 per...
-
Pangasa Co. paid its annual worker accident insurance premium of $48,000 on its manufacturing facility in January. The company expects two worker accidents to happen during the year, and to make...
-
3. The game of baseball is often analyzed using Markov models. The state of the game can be represented by listing bases that have runners and keeping track of how many outs there are. There are...
-
Thornton Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,300 containers follows. Unit-level materials...
Study smarter with the SolutionInn App