Keynes's theory of consumption predicts that the aggregate saving rate
A) increases as society becomes richer.
B) falls as society becomes richer.
C) is constant in the long-run.
D) falls with higher incomes in a cross-section of income.
Correct Answer:
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Q1: Figure 15-1 Q4: The higher the marginal propensity to consume,the Q6: Which of the following is not usually Q13: The largest component of total spending is Q22: The permanent-income hypothesis seeks primarily to explain Q23: Both the PIH and the LCH predict Q25: The challenge for economists in the early Q33: Friedman measured "permanent" income by assuming that Q38: While Modigliani's LCH is similar to Friedman's Q54: Both the PIH and the LCH predict
A)smaller
A)private
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