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eco midterm
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Terms in this set (17)
The competitive monetary equilibrium attains the golden rule only
if the rate of return on money is constant.
false
A decrease in the money supply growth rate z causes the
equilibrium young age consumption level c∗1 to increase.
false
An increase in population growth rate n has no effect on the
golden rule level of young age consumption cGR1
false
If the population is constant, the real demand for money is also
constant in a stationary competitive monetary equilibrium (n = 1).
true
If the population and money supply are is constant, but each young
generation produces twice as much endowment than the previous young generation, equilibrium rate of return on money is equal to 2.
true
A decrease in money supply growth rate z causes individuals
to demand more money when young and reduce their young age
consumption
true
If the money supply growth rate z is higher than the population
growth rate n, then there is inflation.
true
If the money supply growth rate z is lower than the population
growth rate n, then there is inflation.
false
The competitive monetary equilibrium can never attain a better
utility level than the golden rule allocation.
true
The competitive monetary equilibrium can attain a better
utility level than the golden rule allocation.
false
A decrease in money supply growth rate z causes individuals
to demand less money when young and increase their young age
consumption.
false
A increase in money supply growth rate z causes individuals
to demand more money when young and reduce their young age
consumption.
false
A monetary policy that sets z = 2n implies that the equilibrium
price of the consumption good doubles from one period to another.
true
A monetary policy that sets z = 0.5n implies that the equilibrium
price of money doubles from one period to another
true
competitive monetary equilibrium attains golden rule when money supply is constant
true
decrease in money supply growth rate z causes the equilibrium young age consumption level to decrease
true
increase in population growth rate n effects the golden rule level of young age consumption
true
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