While Modigliani's LCH Is Similar to Friedman's PIH in Several

question 42

Multiple Choice

While Modigliani's LCH is similar to Friedman's PIH in several ways,it does differ in that it

• A)assumes individuals base their consumption decisions on a time span greater than one year.
• B)assumes that individuals prefer to maintain a stable consumption pattern.
• C)attempted to reconcile the seemingly paradoxical cross-section and time-series empirical data.
• D)gives an important role to assets as a determinant of consumption behavior.

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Definitions:

Wilcoxon Rank Sum Test

A non-parametric test used to compare two independent samples to determine whether there is a significant difference between their distributions.

Kruskal-Wallis Test

A non-parametric statistical test that determines if there are statistically significant differences between two or more groups of an independent variable on a continuous or ordinal dependent variable.

Wilcoxon Test Statistic

A non-parametric statistical measure used to compare two paired groups to assess whether their population mean ranks differ.

Level Of Significance

The probability of rejecting the null hypothesis when it is actually true, typically represented by alpha (α).