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:

Cultural Blocks

Psychological barriers or social norms that inhibit creativity or prevent individuals from thinking innovatively within a cultural context.

Creative Decision Making

The process of generating innovative solutions during the decision-making process to solve problems or seize opportunities.

Conflict Avoidance

Conflict avoidance is a behavioral strategy where individuals or groups attempt to prevent, evade, or deflect conflicts to maintain peace or harmony.

Whistle-Blowers

Individuals who expose illicit activities, wrongdoing, or misconduct within an organization, often risking their careers to do so.