Suppose an Individual Experiences a $20,000 Increase in Real Income

Multiple Choice

Suppose an individual experiences a $20,000 increase in real income and the individual believes this increase in income is permanent.Economic theory suggests that this individual's current consumption will

A) remain unchanged.
B) increase by more than $20,000.
C) increase by at most $20,000.
D) decrease or remain unchanged, depending on the value of the real interest rate.
E) decrease, remain unchanged, or increase, depending on the value of the real interest rate.