While Modigliani's LCH is similar to Friedman's PIH in several ways,it does differ in that it
A)assumes individuals base their consumption decisions on a time span greater than one year.
B)assumes that individuals prefer to maintain a stable consumption pattern.
C)attempted to reconcile the seemingly paradoxical cross-section and time-series empirical data.
D)gives an important role to assets as a determinant of consumption behavior.

Question

Quizplus · Accepted Answer

LCH gives an important role to assets as a determinant of consumption behavior, which is not a feature of Friedman's PIH.

While Modigliani's LCH Is Similar to Friedman's PIH in Several