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What does the consumption function puzzle refer to?
- a)The discrepancy between Keynes's theory and empirical findings
- b)The consistent agreement between various consumption theories
- c)The ease with which the consumption function can be predicted
- d)The lack of research on factors influencing consumption
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
What does the consumption function puzzle refer to?a)The discrepancy b...
The consumption function puzzle refers to the discrepancy between Keynes's theory and empirical findings.
Key Points:
- **Keynes's Theory**: Keynes proposed a consumption function that suggests that individuals' consumption is determined by their disposable income. According to his theory, as income increases, consumption also increases, but at a slower rate.
- **Empirical Findings**: However, empirical studies have shown that individuals do not always spend a consistent proportion of their income on consumption. Factors such as wealth, expectations, and demographics also play a significant role in determining consumption behavior.
- **Discrepancy**: This discrepancy between Keynes's theory and actual consumption behavior is what constitutes the consumption function puzzle. Researchers have been trying to reconcile these differences and come up with a more accurate model of consumer behavior.
In conclusion, the consumption function puzzle highlights the challenge of accurately predicting consumption behavior and the complexity of factors influencing individuals' spending decisions. Researchers continue to study this phenomenon to improve economic forecasting and policy-making.
Key Points:
- **Keynes's Theory**: Keynes proposed a consumption function that suggests that individuals' consumption is determined by their disposable income. According to his theory, as income increases, consumption also increases, but at a slower rate.
- **Empirical Findings**: However, empirical studies have shown that individuals do not always spend a consistent proportion of their income on consumption. Factors such as wealth, expectations, and demographics also play a significant role in determining consumption behavior.
- **Discrepancy**: This discrepancy between Keynes's theory and actual consumption behavior is what constitutes the consumption function puzzle. Researchers have been trying to reconcile these differences and come up with a more accurate model of consumer behavior.
In conclusion, the consumption function puzzle highlights the challenge of accurately predicting consumption behavior and the complexity of factors influencing individuals' spending decisions. Researchers continue to study this phenomenon to improve economic forecasting and policy-making.
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Community Answer
What does the consumption function puzzle refer to?a)The discrepancy b...
The consumption function puzzle refers to the contradiction between Keynes's consumption theory and empirical findings, specifically the conflict between Keynes's theory and Kuznets's long-term time series data.
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What does the consumption function puzzle refer to?a)The discrepancy between Keynes's theory and empirical findingsb)The consistent agreement between various consumption theoriesc)The ease with which the consumption function can be predictedd)The lack of research on factors influencing consumptionCorrect answer is option 'A'. Can you explain this answer?
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What does the consumption function puzzle refer to?a)The discrepancy between Keynes's theory and empirical findingsb)The consistent agreement between various consumption theoriesc)The ease with which the consumption function can be predictedd)The lack of research on factors influencing consumptionCorrect answer is option 'A'. Can you explain this answer? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What does the consumption function puzzle refer to?a)The discrepancy between Keynes's theory and empirical findingsb)The consistent agreement between various consumption theoriesc)The ease with which the consumption function can be predictedd)The lack of research on factors influencing consumptionCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What does the consumption function puzzle refer to?a)The discrepancy between Keynes's theory and empirical findingsb)The consistent agreement between various consumption theoriesc)The ease with which the consumption function can be predictedd)The lack of research on factors influencing consumptionCorrect answer is option 'A'. Can you explain this answer?.
What does the consumption function puzzle refer to?a)The discrepancy between Keynes's theory and empirical findingsb)The consistent agreement between various consumption theoriesc)The ease with which the consumption function can be predictedd)The lack of research on factors influencing consumptionCorrect answer is option 'A'. Can you explain this answer? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What does the consumption function puzzle refer to?a)The discrepancy between Keynes's theory and empirical findingsb)The consistent agreement between various consumption theoriesc)The ease with which the consumption function can be predictedd)The lack of research on factors influencing consumptionCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What does the consumption function puzzle refer to?a)The discrepancy between Keynes's theory and empirical findingsb)The consistent agreement between various consumption theoriesc)The ease with which the consumption function can be predictedd)The lack of research on factors influencing consumptionCorrect answer is option 'A'. Can you explain this answer?.
Solutions for What does the consumption function puzzle refer to?a)The discrepancy between Keynes's theory and empirical findingsb)The consistent agreement between various consumption theoriesc)The ease with which the consumption function can be predictedd)The lack of research on factors influencing consumptionCorrect answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for B Com.
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What does the consumption function puzzle refer to?a)The discrepancy between Keynes's theory and empirical findingsb)The consistent agreement between various consumption theoriesc)The ease with which the consumption function can be predictedd)The lack of research on factors influencing consumptionCorrect answer is option 'A'. Can you explain this answer?, a detailed solution for What does the consumption function puzzle refer to?a)The discrepancy between Keynes's theory and empirical findingsb)The consistent agreement between various consumption theoriesc)The ease with which the consumption function can be predictedd)The lack of research on factors influencing consumptionCorrect answer is option 'A'. Can you explain this answer? has been provided alongside types of What does the consumption function puzzle refer to?a)The discrepancy between Keynes's theory and empirical findingsb)The consistent agreement between various consumption theoriesc)The ease with which the consumption function can be predictedd)The lack of research on factors influencing consumptionCorrect answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
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