Economy, asked by Year2738, 1 year ago

explain the terms Short run and long run consumption function

Answers

Answered by jacekylie1
0

The short run consumption function has a positive intercept and a relatively low marginal propensity to consume (.6+ or so), while the long run consumption function is essentially proportional to income (as an empirical matter, no significant constant term and a much larger marginal propensity to consume, .9+ or so).

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