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Compare and Contrast the "Life Cycle" Hypothesis and the "Permanent

question 146

Essay

Compare and contrast the "life cycle" hypothesis and the "permanent income" hypothesis. What are their respective implications for inequality in the income distribution?


Definitions:

Predict

The act of forecasting future events or conditions based on current knowledge or past experiences.

Describe

The act of giving a detailed account or picture of something in words, including all relevant characteristics, qualities, or events.

Explain

To make something clear or easy to understand by describing or giving information about it.

Behavioral School

A perspective in psychology focusing on observable behaviors and the ways in which learning influences behavior, discounting internal mental processes.

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