Question
Question 1 According to Lewis et al . (2010) Figure 10.1, the consumption ratio was over 100% in 2004. (Figure 10.1 is also included in
Question 1
According to Lewis et al. (2010) Figure 10.1, the consumption ratio was over 100% in 2004. (Figure 10.1 is also included in the lecture slides).
- a)How is saving defined?
- b)What was the saving ratio in 2004?
- c)Explain how the consumption ratio can be over 100% (of disposable income).
Question 2
Explain the 'permanent income' theory of household consumption expenditure.
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Principles of economics
Authors: N. Gregory Mankiw
6th Edition
978-0538453059, 9781435462120, 538453052, 1435462122, 978-0538453042
