According to the Current Income Hypothesis

question 161

Multiple Choice

According to the current income hypothesis,

• A) a change in income regarded as temporary will not affect consumption much since it will have little effect on average lifetime income.
• B) regardless of whether a change in disposable personal income is permanent or temporary; people will change consumption by moving along the consumption function.
• C) a change in income regarded as permanent will have a greater impact on saving than on consumption.
• D) a change in income regarded as temporary will have a greater impact on saving than on consumption.

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Definitions:

Animals

Multicellular, eukaryotic organisms in the kingdom Animalia that are characterized by their ability to move voluntarily, consume organic materials, and have sensory and nervous systems.

Lophotrochozoa

A clade within the animal kingdom that includes organisms with a distinctive developmental stage or feeding structure, such as mollusks, annelids, and brachiopods.

Deuterostomes

A major group of animals characterized by their embryonic development, in which the anus forms before the mouth during early embryogenesis.

Embryos

Early developmental stages of multicellular organisms following fertilization, during which cells divide and specialize to form the structure and organs of the organism.