According to the Forward-Looking Model, Consumption

question 151

Multiple Choice

According to the forward-looking model, consumption

• A)reacts mostly to a permanent change in income.
• B)reacts mostly to a temporary change in income.
• C)reacts equally to permanent or temporary changes in income.
• D)is always subject to a liquidity constraint.
• E)does not react to either temporary or permanent changes in income.

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Definitions:

Internal Conflict

A psychological struggle within the mind of an individual, arising from opposing demands or impulses.

Major Types

Principal or most significant categories or forms within any general field of study or area of interest.

Conform to Expectations

The behavior of adjusting one's actions, attitudes, or beliefs to match those of a group or societal standards.

Perform

To carry out, execute, or conduct an activity or task.