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Questions and Answers
According to Kuznets' empirical studies, what remains almost constant over a long period of time?
According to Kuznets' empirical studies, what remains almost constant over a long period of time?
- The relative income hypothesis
- The savings proportion
- The increase in income
- The average propensity to consume (correct)
What does Duesenberry's relative income hypothesis suggest about consumption in the long run?
What does Duesenberry's relative income hypothesis suggest about consumption in the long run?
- Consumption will increase at a higher rate than income
- Consumption will decrease as income increases
- Consumption will remain constant regardless of income
- Consumption will increase proportionally with income (correct)
According to Duesenberry, what happens to savings as income increases for individuals with relatively low incomes?
According to Duesenberry, what happens to savings as income increases for individuals with relatively low incomes?
- Savings remain constant regardless of income
- Savings decrease as income increases
- Savings increase at a higher rate than income
- Savings do not increase proportionally with income (correct)
Why do individuals with relatively low incomes not increase their savings proportionally with income according to Duesenberry?
Why do individuals with relatively low incomes not increase their savings proportionally with income according to Duesenberry?
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Who does Duesenberry's relative income hypothesis apply to?
Who does Duesenberry's relative income hypothesis apply to?
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