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:

Rules-Based

A system or approach that is guided by a set of established rules or standards.

IFRS

International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board that guide the financial reporting of companies globally.

Rise

An increase in a metric or quantity, often used in financial contexts to indicate growth or upward movement in value.

IFRS

International Financial Reporting Standards, a set of accounting rules prescribed for financial reporting on an international level.