Which of the Following Have Been Advanced to Explain Why

question 30

Multiple Choice

Which of the following have been advanced to explain why estimates of the marginal propensity to consume out of temporary increments in income are too high relative to what the theory predicts?

• A) People overspend temporary windfalls because they do not believe that they are temporary.
• B) People contract their consumption too far because they are liquidity constrained by their inability to borrow against their expected return to normal income levels.
• C) People discount the future significantly when they make their intertemporal consumption decisions.
• D) a and b only.
• E) a, b, and c.

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Emergent Leader

An individual who naturally assumes a leadership role in a group without formal authority, due to their skills, personality, or actions.

Effective Leader

A person who successfully guides and inspires others towards achieving shared goals through their actions and decisions.

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Individuals who assert control or influence over others in group settings, often setting direction and making decisions.