If people leave bequests primarily because they are uncertain about the timing of their deaths,
A) the marginal propensity to consume out of a temporary change in income would tend to be higher than in the simple version of the LCH.
B) unrealized capital gains from higher housing prices will probably lead to a higher consumption-to-income ratio than in the simple version of the LCH.
C) increases in wealth from the stock market would be consumed over a longer time horizon than in the simple version of the LCH.
D) A and C are both correct.
C
You might also like to view...
An increase in the employment tax will have no effect on output if the labor supply curve
A) is perfectly vertical. B) has a positive slope. C) is perfectly horizontal. D) has a negative slope.
When national output rises, the economy is said to be in
A) an expansion. B) a deflation. C) an inflation. D) a recession.