The Apparent Conflict Between the Time-Series and Cross-Section Evidence on the U.S.saving

question 25

Multiple Choice

The apparent conflict between the time-series and cross-section evidence on the U.S.saving ratio,where cross-section studies predict a long-run ________ in the ratio that does not emerge from the time-series studies,is ________ by the permanent-income and life-cycle hypotheses.

• A)rise,resolved
• B)rise,created
• C)fall,resolved
• D)fall,created

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Definitions:

Preference Test

A preference test is a method used to assess individuals' choices or affinities among different options, typically to understand their likes, dislikes, or behavioral tendencies.

Sign

An object, quality, or event whose presence or occurrence indicates the possible presence of something else, often used in communication.

Hedonism

A philosophical theory or approach that suggests the pursuit of pleasure and intrinsic goods are the primary or most important goals of human life.

Epicurus

An ancient Greek philosopher who founded Epicureanism, which teaches that happiness comes from pursuing pleasure and avoiding pain, focusing on simple pleasures and friendship.