Suppose That People Looked Upon a $1,000 Windfall as 50

Multiple Choice

Suppose that people looked upon a $1,000 windfall as 50 percent permanent and 50 percent temporary. The short-run marginal propensity to consume out of that $1,000

A) would be 50 percent because the entire permanent component would be spent in the year it was received.
B) would be slightly higher than 50 percent because all the permanent component and a small part of the temporary component would be spent in the year it was received.
C) would be significantly greater than 50 percent because people always spend at least 50 percent of even a temporary increase and all of a permanent increase.
D) would be approximately 0.91 because that is the estimated "Keynesian" marginal propensity to consume.
E) none of the above.