According to the Permanent-Income Hypothesis, If Consumers Receive a One-Time

question 85

Multiple Choice

According to the permanent-income hypothesis, if consumers receive a one-time income bonus, then they will:

• A) save most of it in the current year.
• B) spend most of it in the current year.
• C) spend one half of it and save one-half of it in the current year.
• D) not alter their consumption or saving in the current year.

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Definitions:

Behaviors

Actions or reactions of an individual or system in response to external or internal stimuli.

Strengthen

To make or become stronger, more forceful, or more resistant to stress.

Primary Reinforcer

A stimulus that is naturally rewarding for an individual, such as food, water, or sleep, that satisfies basic survival needs.

Grades

A system used to evaluate or rate students' performance in academic settings.