The Keynesian consumption function and the theory of intertemporal choice are consistent for households ________.
A) with a binding budget constraint
B) with little or no initial wealth
C) whose consumption remains positive, even if income is zero
D) whose consumption cannot exceed current income
Question 2
The costs associated with the user cost of capital include all of the following except
A) the real price of the capital good.
B) the expected change in the marginal cost of capital based on expectations of the future.
C) the real interest cost of borrowing to finance the purchase of the capital good.
D) the depreciation costs associated with actually using the capital good.
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