According to the Permanent-Income Hypothesis, If Consumers Receive a Permanent

Multiple Choice

According to the permanent-income hypothesis, if consumers receive a permanent increase in their salary then they will:

A) save most of it in the current year.
B) spend most of it in the current year.
C) spend one half of it and save one-half of it in the current year.
D) not alter their consumption or saving in the current year.