If Two Households Have the Same Disposable Income in the Current

question 239

Multiple Choice

If two households have the same disposable income in the current year, the household with the

• A) lower expected future income will consume more today while it has the money.
• B) lower expected future income will spend a larger portion of its current income on consumption today because it will increase its saving in the future.
• C) higher expected future income will consume a larger portion of its current income today.
• D) none of the above

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Definitions:

Accounting Records

Documentation and books that systematically record all financial transactions of an entity, providing a basis for financial reporting.

Bank Errors

Mistakes made by a bank in the accounting records or transactions related to a customer's account.

Bank Reconciliation

Bank reconciliation is a process that matches the balance on a company’s books to the corresponding amount on its bank statement, confirming that figures are correct and in agreement.

Accounting Records

Financial documents and files that systematically record all monetary transactions of an entity.