Preferences for Steady Consumption Paths Over Variable Consumption Paths Mean

question 6

Multiple Choice

Preferences for steady consumption paths over variable consumption paths mean that

• A) any permanent change in an individual's disposable income must generate either a change in the desired bequest or a comparable change in consumption.
• B) the applicable marginal propensity to consume out of a permanent change in an individual's disposable income must be close to 1.
• C) any temporary change in an individual's disposable income must generate only a small change in yearly consumption if it is to be spread out smoothly over a foreseeable lifetime.
• D) all of the above.
• E) a and c only.

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Definitions:

Substantially Complete

A condition in which a project or task has been completed to a degree that it can effectively be used for its intended purpose, even if minor details remain unfinished.

Imbalanced

A state or condition where things are not equal or in correct proportions.

Moral Problems

Dilemmas or conflicts that arise when faced with decisions that affect the welfare or rights of others, often requiring ethical judgment.

Moral Standards

Principles that govern behaviors and actions, determined by societal norms, ethics, and laws defining what is considered right and wrong.