According to the Permanent Income Hypothesis,the Impact of ________

question 24

Multiple Choice

According to the permanent income hypothesis,the impact of ________.

• A)a change in permanent income on consumption is greater than the impact resulting from a change in transitory income
• B)a change in transitory income on consumption is greater than the impact resulting from a change in permanent income
• C)a change in transitory income is felt primarily through changes in the total tax revenue paid to the federal government
• D)a change in permanent income on consumption is larger than the impact resulting from a change in future income

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Definitions:

Maker

The individual or entity that creates or signs a promissory note, committing to pay the specified amount.

Maker

The individual or entity that creates, signs, and issues a promissory note, thereby promising to pay a certain sum to a specified person.

Accommodation Party

An individual or entity that signs a negotiable instrument on behalf of another party, guaranteeing payment without direct benefit.

Demand Instrument

is a financial document that requires the payer to pay the full amount upon demand by the holder, such as a check.