Which of the Following Statements Is an Accurate Statement of an Implication

Multiple Choice

Which of the following statements is an accurate statement of an implication of the forward-looking theory of consumption?

A) The marginal propensity to consume tends to be smaller than it would be otherwise because people view at least part of every income change as temporary.
B) Sensitivity of consumption to the interest rate tends to make the IS curve flatter than it would be otherwise.
C) Sensitivity of saving to the interest rate tends to make the marginal propensity to consume smaller than it would be otherwise.
D) The likely effect of the implied reduction in the short-run marginal propensity to consume tends to make the IS curve steeper than it would be otherwise.
E) All of the above.