Multiple Choice
The sensitivity of current consumption to changes in current income can be explained by
A) myopia
B) the absence of liquidity constraints
C) the fact that consumers have the opportunity to borrow
D) the fact that consumers always realize when a permanent change in income has occurred
E) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
Q26: The life-cycle theory of consumption can be
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
Q32: According to the permanent-income theory<br>A)increases in current
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