Habit formation in consumption implies that
A. the amount of current consumption spending is not related to the amount of past real consumption spending.
B. the amount of current consumption spending is negatively related to the amount of past real consumption spending.
C. consumption spending changes in a random manner over time.
D. the amount of current consumption spending is directly related to the amount of past real consumption spending.
Answer: D
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a. True b. False Indicate whether the statement is true or false
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Indicate whether the statement is true or false
Which statement is true of an exogenous variable in an economic model?
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