Suppose That an Individual Receives an Unexpected, One-Time Windfall of

question 32

Multiple Choice

Suppose that an individual receives an unexpected, one-time windfall of
$1,000. To determine its effect on future consumption,

• A) preferences about the desirability of both steady consumption and the desired size of the bequest are required.
• B) it would be necessary to know the desired size of the bequest, but the desirability of steady consumption is immaterial.
• C) it would be necessary to know the value ascribed to steady consumption, but the desired size of the bequest is immaterial.
• D) neither the desirability of steady consumption nor the desired size of the bequest is material because $1,000 is too small a sum to be affected by either.
• E) none of the above.

---

Definitions:

Sense of Identity

The feeling or perception of being distinct and separate from others, with a consistent personality.

Self-Esteem

A person's personal assessment of their value, involving feelings and convictions like esteem and embarrassment.

Adolescents

Young people going through the phase of development from childhood to adult life, focusing on physical, psychological, and social changes.

Ethnic Identity

A sense of belonging to an ethnic group.