When asset prices increase above their fundamental values it is called an

In a two-period model with default, if the market interest rate is low, then

A) default is more likely B) there is no effect on the nation's default decision. C) default is less likely. D) the income effect is larger than the substitution effect.

During the period from 2001 to 2006, there were several major cuts in personal income tax rates. What effect did these have on the value of the multiplier?

a. They decreased the value of the multiplier. b. They had no effect on the multiplier. c. They increased the value of the multiplier. d. The effect was uncertain.