According to Friedman,the Apparent Conflict Between Cross-Section Data Which Shows

question 9

Multiple Choice

According to Friedman,the apparent conflict between cross-section data which shows a saving rate that varies with income group and time-series data which shows that the saving ratio over the past century is fairly constant is resolved by

• A)pointing out that cross-section and time-series data are not comparable.
• B)interpreting the low saving of poor people as due to the fact that they must buy necessities.
• C)interpreting the high saving of rich people as due to the transitory nature of much income earned by the rich.
• D)distinguished between a permanent marginal propensity to consume and a transitory marginal propensity to consume.

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Definitions:

Rising Deficits

An economic condition where a government's expenditures exceed its revenues over a specified period, leading to an increase in debt.

Inflation

The speed at which prices for goods and services generally go up, diminishing the buying power.

Industrial Base

The sector of the economy made up of manufacturing, engineering, and infrastructure companies, which is fundamental for a country's economic development.

John D. Rockefeller

John D. Rockefeller was an American industrialist and philanthropist, best known for founding and leading the Standard Oil Company.