According to the Current Income Hypothesis

Multiple Choice

According to the current income hypothesis,

A) a change in income regarded as temporary will not affect consumption much since it will have little effect on average lifetime income.
B) regardless of whether a change in disposable personal income is permanent or temporary; people will change consumption by moving along the consumption function.
C) a change in income regarded as permanent will have a greater impact on saving than on consumption.
D) a change in income regarded as temporary will have a greater impact on saving than on consumption.