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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Definitions:

Machine-to Limit

Adjusting or configuring machinery or components to operate within specific, prescribed limits or tolerances for optimal performance or safety.

Discard Limit

The specified point of wear or damage at which a component or part is no longer considered safe or functional and must be replaced.

Parallelism

The extent to which the friction surface of a brake disc varies in thickness. Slight variations in rotor thickness result in brake pedal pulsation as the pads must move in and out to compensate. Also called taper or thickness variation.

Runout

The degree of wobble or deviation from true circular rotation often related to rotors or wheels.