Suppose That Your Annual Income Has Averaged $40,000 for the Past

question 27

Multiple Choice

Suppose that your annual income has averaged $40,000 for the past 10 years and that you expect it will average $40,000 over the next 10 years. If your income this year increases to $50,000 and you increase your consumption expenditures by $10,000, then you are most likely acting according to the

• A) transitory income theory of consumption.
• B) current income hypothesis.
• C) permanent income hypothesis.
• D) disposable personal income theory of consumption.

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Definitions:

Distributive Justice

The degree to which outcomes are distributed fairly.

Dignity and Respect

Treating individuals with inherent worthiness and consideration, recognizing and valuing their rights, feelings, and perspectives.

Individualism View

A view of ethical behaviour that holds that ethical behaviour advances long-term self-interests.

Personal Enrichment

Activities or pursuits undertaken to improve one's self-knowledge, skills, or well-being.