According to the Life-Cycle Model, When Wealth Is Constant in the Short

question 40

Multiple Choice

According to the life-cycle model, when wealth is constant in the short run, the average propensity to consume ______ as income increases.

• A) increases
• B) decreases
• C) remains constant
• D) can either increase or decrease

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Definitions:

Cognitive Therapies

Psychological treatments that are designed to address cognitive processes, aiming to alter maladaptive thinking patterns to improve emotional regulation and develop personal coping strategies.

Emotional Reactions

Responses of the mind and body to a stimulus, experienced as feelings, that influence mood and behavior.

Progressive Relaxation

A technique aimed at reducing stress and anxiety by alternately tensing and relaxing different muscle groups throughout the body.

Group Therapy

A form of psychotherapy involving one or more therapists working with several people at the same time.