Multiple Choice
According to the permanent-income theory
A) increases in current income lead to proportionate increases in consumption and saving
B) a rise in income affects consumption only after a delay of several years
C) a person's consumption in any given year will be strongly affected by interest rate changes
D) a person's consumption in any year will always be closely tied to his/her highest previous level of consumption
E) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
Q27: According to the simplified life-cycle theory of
Q28: The random-walk theory of consumption asserts that
Q29: There is empirical evidence for the fact
Q30: According to the permanent-income theory, if individuals
Q31: The sensitivity of current consumption to changes
Q33: When the aggregate consumption function is defined
Q34: Any policy designed to increase business saving
Q35: Buffer-stock saving<br>A)is consistent with the life-cycle hypothesis
Q36: If you are age 20, have no
Q37: The theory of consumption of durable goods<br>A)is