Answered: If the business cycle component of…

If the business cycle component of consumption is found to be countercyclical, this implies higher volatility of consumption relative to investment. True or False? Please explain briefly.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter10: Keynesian Macroeconomics And Economic Instability: A Critique Of The Self Regulating Economy

Section: Chapter Questions

Problem 6QP

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If the business cycle component of consumption is found to be countercyclical, this implies higher volatility of consumption relative to investment.

True or False?

Please explain briefly.

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