Economics · Economy
The Relative Income Hypothesis explains the stability of the long-run average propensity to consume mainly due to which factors?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Credit market imperfections and asset values
- 2Interest rate rigidity and monetary policy
- 3Habit persistence and demonstration effect✓
- 4Rational expectations and market clearings
Correct answer
Habit persistence and demonstration effect
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