Suppose That Jake and Abby Each Win $1,000 in a State

question 201

Multiple Choice

Suppose that Jake and Abby each win $1,000 in a state lottery.Jake spends his winnings on a new television.Abby saves her winnings for a "rainy day." Which of the following is correct?

• A) Both Jake and Abby's behaviors suggest that they base their purchasing decisions on transitory income.
• B) Jake's behavior suggests that he bases his purchasing decisions on transitory income rather than permanent income.Abby's behavior suggest that she bases her purchasing decisions on permanent income rather than transitory income.
• C) Jake's behavior suggests that he bases his purchasing decisions on permanent income rather than transitory income.Abby's behavior suggests that she bases her purchasing decisions on transitory income rather than permanent income.
• D) Both Jake and Abby's behaviors suggest that they base their purchasing decisions on permanent income.

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Definitions:

Services

Constitutes intangible economic activities provided by businesses or individuals that result in customer satisfaction without producing a physical product.