If Two Households Have the Same Disposable Income in the Current

question 106

Multiple Choice

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

• A) higher expected future income will consume a larger portion of its current income today.
• 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) lower expected future income will consume more today while it has the money.
• D) none of the above

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Definitions:

Graph

A visual representation of data, equations, or functions, typically drawn on a coordinate plane.

Initial Velocity

The velocity of an object at the beginning of a period of time, crucial for solving kinematic equations.

Coin

A piece of metal issued by governmental authority as money.

Ground

The solid surface of the earth or a reference level against which measurements or comparisons can be made.