Would the Keynesian consumption function work well in a world of libertarian paternalists?
What will be an ideal response?
If consumption behavior depends mostly on current constraints and immediate consequences, then current consumption is driven by current income, as the Keynesian consumption function says. Libertarian paternalism seeks to tighten the constraints. More effective inducements to save might lower the marginal propensity to consume, but it will be as true as ever that changes in current consumption will be driven principally by changes in current income.
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In monopolistic competition in the long run, firms
A) make zero economic profit and require more capacity. B) incur an economic loss and require more capacity. C) make an economic profit and have excess capacity. D) make zero economic profit and have excess capacity. E) make an economic profit and require more capacity.
For federally chartered banks, the "primary" federal regulator is the
A) Federal Reserve. B) FDIC. C) House Banking Committee. D) Comptroller of the Currency.