Which of the Following Provides an Example of Decisions That

question 29

Multiple Choice

Which of the following provides an example of decisions that are consistent with the permanent income theory?

• A) New retirees do not know that their retirement pensions provide a fixed income for life.
• B) An increase in government spending during a recession causes a bigger deficit that year but is not a long-run increase in spending.
• C) A one-year tax rebate increases disposable income, but households save most of the rebate.
• D) Landlords set rent as a percentage of each renter's income.

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Definitions:

Neuroticism

A personality trait characterized by emotional instability, anxiety, moodiness, worry, and fear.

Secure

Pertaining to measures taken to protect information, systems, and resources from unauthorized access, harm, or misuse.

Competencies

The skills, knowledge, and abilities that enable an individual to perform a job successfully.

Motivations

The internal and external factors that stimulate desire and energy in people to be continually interested and committed to a job, role, or subject.