Both the PIH and the LCH Predict That

question 36

Multiple Choice

Both the PIH and the LCH predict that

• A)the sum of saving and consumer durable purchases should increase in relation to personal income in booms and fall in recessions.
• B)the sum of saving and consume nondurable purchases should increase in relation to personal income in booms and fall in recessions.
• C)the sum of saving and consumer durable purchases should decrease in relation to personal income in booms and increase in recessions.
• D)saving should increase in relation to personal income in booms and fall in recessions,but that consumer durables tend to behave in a more stable manner over a cycle.