The representative consumer's discount factor B
A. equals the share of production going to labor
B. is a parameter capturing how patient the consumer is
C. is a choice parameter controlling consuming versus saving
D. is the reduction in price from a competitive factor market
Answer: B. is a parameter capturing how patient the consumer is
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The 2002 tax reform is a good example of special interests being less influential because Congress was considering comprehensive tax reform
a. True b. False
Answer the following questions:
a. What is the equation of exchange? Explain each component. b. What assumptions are placed on the equation of exchange to generate the quantity theory of money? c. Explain the quantity theory of money and what it implies about the impact of changes in the money supply on real output and prices.