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An Intuitive Explanation of the Observed Discrepancy Between Short- and Long-Run

Question 3

Multiple Choice

An intuitive explanation of the observed discrepancy between short- and long-run marginal propensities to consume must focus on why


A) consumption falls by less than income in the short run but eventually achieves over 90 percent of income's decline.
B) consumption climbs slower than income in the short run but eventually exhausts over 90 percent of income's increase.
C) consumption moves more slowly in either direction than income in the short run but eventually matches either move almost exactly.
D) a and b.
E) none of the above.

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