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

question 100

Multiple Choice

According to the permanent-income hypothesis, if consumers receive a permanent increase in their salary 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:

Depression

A mental health issue denoted by perpetual melancholy or lack of interest in normal endeavors, greatly obstructing daily performance.

Mania

A mental health condition characterized by periods of extreme euphoria, heightened energy, and, in some cases, delusions or hallucinations, typically seen in bipolar disorder.

Schizophrenia

Schizophrenia is a severe mental disorder characterized by distorted thinking, perceptions, emotions, language, sense of self, and behavior.

Hallucinations

Experiences of awareness and alertness without external inputs that possess characteristics resembling genuine perception.