The Life-Cycle Theory of Consumption Implies That

question 6

Multiple Choice

The life-cycle theory of consumption implies that

• A)the mpc out of wealth is very small
• B)the mpc out of permanent income is larger than the mpc out of transitory income
• C)a large change in stock values can affect the economy, but the effect is fairly small
• D)an individual's mpc out of permanent income changes with age
• E)all of the above

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Definitions:

Photosynthesis

The process by which green plants and some other organisms use sunlight to synthesize foods from carbon dioxide and water, generating oxygen as a byproduct.

Aerobic Respiration

A process of producing cellular energy involving oxygen. Cells use this method to convert glucose and oxygen into energy.

Photosynthesis

The process by which green plants and some other organisms use sunlight to synthesize nutrients from carbon dioxide and water.

Lactate Fermentation

An anaerobic metabolic process by which glucose or other six-carbon sugars are converted into cellular energy and the metabolite lactate, which is typical in muscle cells under high demand for energy.