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The "Life Cycle" and "Permanent Income" Theories of Consumption Share

Question 51

Multiple Choice

The "life cycle" and "permanent income" theories of consumption share which of the following features?


A) Consumption remains stable on a permanent basis.
B) Consumption spending depends on income, rather than wealth.
C) Consumption spending should fluctuate widely from year to year.
D) Consumers look ahead to the future in making current spending decisions.
E) Consumption decisions are based on how well the stock market performs.

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