Question: For real intertemporal mode, say whether you think the statement is true, false, or uncertain, and support your answer in a few lines. a)If the
For real intertemporal mode, say whether you think the statement is true, false, or uncertain, and support your answer in a few lines.
a)If the government buys more goods, it must increase the money supply in order to pay for the goods. b). An increase in lifetime wealth decreases current labour supply and increases current consumption demand. c). A budget deficit caused by changing labour income taxes changes the timing of labour input and production. d). In the real intertemporal model, if the representative rm expects the marginal product of capital will be lower in the future than it would otherwise have been, the investment will increase. e). In the real intertemporal model, the equilibrium eects of a temporary increase in total factor productivity include an increase in the real wage and a decrease in the real interest rate.
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