Which of the Following Theories Predicts That Current Consumption Increases

question 423

Multiple Choice

Which of the following theories predicts that current consumption increases when a person expects an increase in future income?

• A) The life-cycle theory of consumption
• B) The permanent income hypothesis
• C) The Keynesian theory of consumption
• D) All of the above

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Definitions:

Nerve Tract

A bundle of nerve fibers (axons) connecting different parts of the nervous system.

Sensation Loss

The partial or complete inability to sense stimuli, which can affect any part of the body and can be due to nerve damage or other conditions.

Golgi Tendon Reflex

A protective reflex mechanism that prevents muscle damage during excessive force generation, by causing muscle relaxation in response to high tension in the tendons.

Stretch Reflex

A muscle contraction in response to stretching within the muscle, a monosynaptic reflex integral for posture and locomotion.