Milton Friedman Argued That, Over Long Periods of Time, the Average

question 43

Multiple Choice

Milton Friedman argued that, over long periods of time, the average propensity to consume is constant because, over these long periods of time:

• A)the variation in income is dominated by the transitory component.
• B)the variation in income is dominated by the permanent component.
• C)it is the behaviour of the average consumer that dominates.
• D)income averages out to a constant.

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Definitions:

U.S. Immigrants

People who have moved to the United States from another country to live permanently.

Real Wage Rates

The purchasing power of wages, adjusted for inflation, indicating the quantity of goods and services wages can buy.

Technological Advance

The introduction of new technologies or improvements in existing technologies that increase productivity and efficiency.

Demand for Labor

The total amount of labor that employers in the economy are willing to hire at a given wage rate, influenced by factors such as productivity, economic conditions, and regulatory environment.