Suppose That Your Annual Income Has Averaged $20,000 for the Past

question 9

Multiple Choice

Suppose that your annual income has averaged $20,000 for the past 10 years and that you expect it will average $20,000 over the next 10 years.If your income this year increases to $30,000 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.