Economists based their prediction that secular stagnation would occur as economies prospered on the conjecture that:
A) the marginal propensity to consume is greater than zero.
B) the marginal propensity to consume is less than one.
C) the average propensity to consume falls as income rises.
D) income is the primary determinant of consumption.

Question

Quizplus · Accepted Answer

The concept of secular stagnation is associated with the idea that as economies grow and incomes rise, the average propensity to consume tends to decrease. This means that individuals, on average, save a higher proportion of their income, potentially leading to reduced aggregate demand and slower economic growth unless offset by other factors such as investment or government spending.

Economists Based Their Prediction That Secular Stagnation Would Occur as Economies