Exam 11: A Real Intertemporal Model with Investment

How many of the following business cycle facts can be explained if the primary cause of business cycles is temporary changes in total factor productivity: procyclical consumption,procyclical investment,procyclical employment,and procyclical real wages?

In the real intertemporal model with investment

When drawn against the real interest rate,the output demand curve unambiguously shifts to the right if

An increase in credit market frictions

Any increase in the present value of taxes for the consumer implies

The marginal cost of investment for the firm is equal to

If firm-level asymmetric information becomes more severe,then

The total government expenditure multiplier is less than one because

For the firm in the real intertemporal model with investment

The demand for current consumption,as plotted against current income,shifts to the right due to all of the following except

When drawn against the real interest rate,the optimal investment schedule shifts to the right if the

In the real intertemporal model,an adverse sectoral shock acts to

When drawn against the current wage,the current labor supply shifts to the right if

Next period's capital is equal to current-period investment

The demand for current consumption,as plotted against the interest rate,shifts to the right due to all of the following except

The intertemporal substitution of leisure effect is used to justify the assumption that current labor supply increases when the

In the real intertemporal model,if future total factor productivity increases,this captures the effects of

An increase in lifetime wealth

If future total factor productivity increases

When drawn against the real interest rate,the output demand curve unambiguously shifts to the right if either or both of the following occur.