The Random-Walk Theory of Consumption Asserts That Changes in Consumption

question 28

Multiple Choice

The random-walk theory of consumption asserts that changes in consumption arise from unexpected changes in income.This approach

• A)clearly contradicts Modigliani's theory
• B)clearly contradicts Friedman's theory
• C)contradicts Modigliani's theory but supports Friedman's theory
• D)supports Modigliani's theory but contradicts Friedman's theory
• E)supports Modigliani's and Friedman's theories

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