A One-Unit Decrease in Current Income, and a One-Unit Increase

question 48

Multiple Choice

A one-unit decrease in current income, and a one-unit increase in lifetime wealth

• A)both have no effect on the consumer's behaviour.
• B)will both have the same effect on savings.
• C)imply that future consumption goes down.
• D)have the same effect on the consumer's current and future consumption.
• E)have different effects on the consumer's current and future consumption.

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Definitions:

Life Estate

A legal arrangement where an individual is given the right to use and benefit from property for the duration of their life, after which the property reverts to another designated party.

Easement

A legal right to use another person's land for a specific, limited purpose, without owning it.

Sever

To cut off, remove, or divide a part of something, often used in legal contexts to describe the separation or termination of legal rights or duties.

Chattels

Personal property or movable possessions, as opposed to real property which includes land and buildings.