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Hector's Wealth Is Zero,he Expects to Work for Another 45

Question 28

Multiple Choice

Hector's wealth is zero,he expects to work for another 45 years at a constant salary of ?$80 000 and live for another 60 years.If Hector receives a $20 000 bonus during his first year of work and he completely smooths consumption over his lifetime,his marginal propensity to consume out of a transitory increase in income is


A) 0.004.
B) 0.017.
C) 0.075.
D) 0.75.

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