Question

1. Household consumption accounts for about ________ of U.S. GDP.

a. two-thirds

b. one-fourth

c. five-sixths

d. one-third

e. one-half

2. In the simple ________ model of consumption, we consider a(n) ________ period lifetime.

a. Marxian; one

b. neoclassical; two

c. constant rate of risk aversion; T

d. Stone-Geary; infinite

e. Keynesian; one

3. In the intertemporal budget constraint, wealth is equal to:

a. financial plus “human” wealth.

b. lifetime income.

c. savings held in stocks and bonds.

d. the overall stock of assets held by future generations.

e. financial wealth.

Which of the following represents human wealth?

a. the level of educational attainment

b. the total stock of assets owned

c. the value of savings

d. skills gained over time

e. the present value of labor income

The consumer chooses his or her ________ to maximize his or her ________.

a. wealth; profits

b. consumption; utility

c. interest rate; wealth

d. income; consumption

e. consumption; income

Answer 1

Q1 option A that is 2/3rd of GDP

Consumption spending is about 60% of GDP in US

Q2 option E that is Keynesian

Q3 option B that is lifetime income

Intertemporal budget constraints depends on the lifetime income . Lifetime income depends on consumption of present and future consumption value .

Q4 option D

Human wewealth is human capital accumulation which is the skills gained overtime

Q5 option B

Consumer choices between consumption pattern in order to maximize his utility or satisfaction derived from the consumption in his life