“According to the permanent income hypothesis, poor people save a smaller fraction of their income (or do not save at all) because their incomes are just a little above subsistence.” Is this statement true or false? Explain.
Added by Nqobile M.
Step 1
Step 1: The permanent income hypothesis states that people will spend money at a level consistent with their expected long-term average income. Show more…
Show all steps
Your feedback will help us improve your experience
Jennifer Stoner and 77 other Macroeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
Is this True or False (briefly explain) According to the Solow Model , the highest sustainable level of consumption is achieved when the saving rate is 100%
Andrew D.
Some studies have found that saving is not very sensitive to the rate of return on savings.
Narayan H.
Most probably, Savings will increase if there is a rise in real Income. True or False
Mukesh D.
Recommended Textbooks
Principles of Economics
Macroeconomics
Economics
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD