If Consumers Obey the Permanent-Income Hypothesis and Have Rational Expectations

question 103

Multiple Choice

If consumers obey the permanent-income hypothesis and have rational expectations, then policy changes affect consumption when the policy changes:

• A) are proposed.
• B) go into effect.
• C) change expectations.
• D) do not surprise consumers.

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Definitions:

Personality Assessment

Personality Assessment is the evaluation of an individual's character traits, behaviors, and attitudes, often for psychological, therapeutic, or employment purposes.

Reliable

Reliable refers to the consistency and dependability of a test, measurement, or source, indicating the extent to which it can be trusted to produce the same results under similar conditions.

Norms

Age-based averages.

Comparisons

Evaluations of the similarities and differences between two or more entities.