(a) Use an appropriate diagram, to explain how the Permanent Income Theory of Consumption reconciles the results of cros
Posted: Thu May 19, 2022 11:02 am
(a) Use an appropriate diagram, to explain how the Permanent
Income Theory of Consumption reconciles the results of
cross-section and time series estimate of the Keynesian aggregate
consumption
function.
(15 marks)
(b) With the help of a diagram, explain the effect of an
increase in nominal income on interest rate.
Income Theory of Consumption reconciles the results of
cross-section and time series estimate of the Keynesian aggregate
consumption
function.
(15 marks)
(b) With the help of a diagram, explain the effect of an
increase in nominal income on interest rate.