The savings rate ________ over the long run but ________ over the short run.
A)is constant as Keynes assumed;varies as Friedman assumed
B)is constant as Friedman assumed;varies as Keynes assumed
C)is constant as Friedman assumed;varies as Friedman assumed
D)varies as Keynes assumed;varies as Keynes assumed

Question

Quizplus · Accepted Answer

Friedman assumed that the savings rate is constant over the long run due to the permanent income hypothesis, but it can vary over the short run due to temporary changes in income.

The Savings Rate ________ Over the Long Run but ________

The Savings Rate Over the Long Run but