Intertemporal choice theory is more consistent with ________. ...

[karlynnae]

Intertemporal choice theory is more consistent with ________.
 
  A) Keynesian theory than the permanent income hypothesis of Friedman
  B) the permanent income hypothesis than Keynesian theory
  C) Keynesian theory than the life-cycle hypothesis
  D) Keynesian theory than the Gini coefficient theory

Question 2

An increase in financial frictions results in ________.
 
  A) an increase in output and inflation
  B) a rise in the interest rate set by monetary policy
  C) a decline in the real interest rates faced by households and firms
  D) a decline in the interest rate set by monetary policy

[yasmina]

Answer to Question 1

B

Answer to Question 2

D