Suppose That Your Annual Income Has Averaged $40,000 for the Past

Multiple Choice

Suppose that your annual income has averaged $40,000 for the past 10 years and that you expect it will average $40,000 over the next 10 years. If your income this year increases to $50,000 and you increase your consumption expenditures by $10,000, then you are most likely acting according to the

A) transitory income theory of consumption.
B) current income hypothesis.
C) permanent income hypothesis.
D) disposable personal income theory of consumption.