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According to Friedman,the Apparent Conflict Between Cross-Section Data Which Shows

Question 90

Multiple Choice

According to Friedman,the apparent conflict between cross-section data which shows a saving rate that varies with income group and time-series data which shows that the saving ratio over the past century is fairly constant is resolved by


A) pointing out that cross-section and time-series data are not comparable.
B) interpreting the low saving of poor people as due to the fact that they must buy necessities.
C) interpreting the high saving of rich people as due to the transitory nature of much income earned by the rich.
D) distinguished between a permanent marginal propensity to consume and a transitory marginal propensity to consume.

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