Duesenberry's Theory of Consumer Behavior
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Questions and Answers

According to J.S. Duesenberry, what is the determinant of an individual's consumption?

  • Current income
  • Previously reached income level
  • Relative income (correct)
  • Absolute income

    • According to Duesenberry, does an individual's consumption depend on their current income?

  • No, it depends on their absolute income
  • No, it depends on their relative position in the income distribution
  • Yes, it depends on their current income
  • Yes, it depends on their previously reached income level (correct)

    • According to Duesenberry's relative income hypothesis, what does an individual's consumption depend on?

  • Their previously reached income level
  • Their current income
  • Their absolute income
  • Their relative position in the income distribution (correct)

    • If the incomes of all individuals in a society increase by the same percentage, what happens to an individual's relative income according to Duesenberry?

    <p>It remains the same</p> Signup and view all the answers

    According to Duesenberry, what does an individual's consumption depend on in relation to other individuals in the society?

    <p>Their relative position in the income distribution</p> Signup and view all the answers

    According to Kuznets' empirical studies, what remains almost constant over a long period of time?

    <p>The average propensity to consume</p> Signup and view all the answers

    According to Duesenberry's relative income hypothesis, what would happen to an individual's savings as their income increases?

    <p>Their savings would not rise much</p> Signup and view all the answers

    What is the reason behind individuals with relatively low incomes not increasing their savings proportionally to their income increase according to Duesenberry?

    <p>Their relative incomes would not change</p> Signup and view all the answers

    Who does Duesenberry's relative income hypothesis apply to?

    <p>All individuals and households</p> Signup and view all the answers

    What does Duesenberry's relative income hypothesis suggest about the community's consumption in the long run?

    <p>It would remain the same proportion of income</p> Signup and view all the answers

    According to Kuznets' empirical studies, what remains almost constant over a long period of time?

    <p>The average propensity to consume</p> Signup and view all the answers

    According to Duesenberry's relative income hypothesis, what is the determinant of an individual's consumption?

    <p>Their relative income</p> Signup and view all the answers

    Who does Duesenberry's relative income hypothesis apply to?

    <p>All individuals and households</p> Signup and view all the answers

    According to Duesenberry, what is the reason behind individuals with relatively low incomes not increasing their savings proportionally to their income increase?

    <p>Their consumption habits</p> Signup and view all the answers

    If the incomes of all individuals in a society increase by the same percentage, what happens to an individual's relative income according to Duesenberry?

    <p>It remains the same</p> Signup and view all the answers

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