The exercise was created 2019-05-31 by annabremberg. Question count: 12.

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  • Which model states that consumption primarily depends on current income? Keynesian consumption function
  • Which model states that consumers choose consumption based on present and future income? Fischer : Intertemporal Choice Model
  • Which model states that savings allow consumers to achieve smooth consumption? Life cycle hypothesis model
  • What model criticises Keynes for "only" using Y and not Permanent Y? Permanent Income Hypothesis
  • What model criticises Fischer for not considering that consumption is unpredictable? Random Walk Hypothesis
  • What model states that we don't make rational decisions since we change our preferences all the time? Economic psychology
  • What does financing constraints mean? difficulties to borrow money for investments
  • A sudden reduction in the availability of loans credit crunch
  • When a group of countries have on single currency monetary union
  • What are two rules for all countries within a monetary union same policy rate and exchange rate
  • What can cause tensions between countries within a monetary union? Asymmetric AD shocks
  • If an area has flexible wages, high labor and capital mobility, symmetric shocks and high trade volumes between countries optimum currency area

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