According to the Permanent Income Hypothesis, a Temporary Increase in Income

question 407

Multiple Choice

According to the permanent income hypothesis, a temporary increase in income that does not affect average lifetime income would

• A)cause a large increase in consumption.
• B)cause no change in consumption.
• C)cause an increase in consumption and saving by the same amount.
• D)cause a decrease in consumption and saving by the same amount.

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Definitions:

Interactional Justice

Refers to the quality of the interpersonal treatment people receive when a decision is implemented.

Procedural Justice

Refers to perceptions that the process used to determine the outcomes were fair.

Informational Justice

The fairness perceived in the way information is conveyed and communicated within an organization.

Restorative Justice

A system of criminal justice that focuses on the rehabilitation of offenders through reconciliation with victims and the community at large.