If Permanent Income Is Always Taken to Equal Disposable Income

Multiple Choice

If permanent income is always taken to equal disposable income in the current year, then a consumption function of the form C = a + bYDp)

A) reveals a long-run marginal propensity to consume that is larger than the short-run marginal propensity to consume.
B) reveals a long-run marginal propensity to consume that is exactly equal to the short-run marginal propensity to consume.
C) reveals a long-run marginal propensity to consume that is smaller than the short-run marginal propensity to consume.
D) defines short- and long-run marginal propensities to consume, to be sure, but insufficient information has been provided to compare them.
E) is difficult to specify in times of uncertain income.