5 Questions
According to Kuznets' empirical studies, what remains almost constant over a long period of time?
The average propensity to consume
What does Duesenberry's relative income hypothesis suggest about consumption in the long run?
Consumption will increase proportionally with income
According to Duesenberry, what happens to savings as income increases for individuals with relatively low incomes?
Savings do not increase proportionally with income
Why do individuals with relatively low incomes not increase their savings proportionally with income according to Duesenberry?
Their relative incomes do not change
Who does Duesenberry's relative income hypothesis apply to?
All individuals and households
Test your knowledge on saving and consumption theories with this quiz! Learn about Kuznets' empirical studies and Duesenberry's relative income hypothesis. Explore the relationship between income and saving as a proportion of income.
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