According to the Permanent Income Hypothesis,which of the Following Should

question 55

Multiple Choice

According to the permanent income hypothesis,which of the following should raise current consumption the most?

• A) a lottery prize of $1,000
• B) an unexpected year-end bonus of $1,000
• C) a temporary tax cut of $1,000
• D) an increase of $1,000 in annual salary
• E) an inheritance of $1,000

---

Definitions:

Adipose Tissue

A type of body tissue containing stored fat that serves as a source of energy, provides insulation and protection to organs.

Vitamin D

A fat-soluble vitamin that is essential for maintaining healthy bones and teeth by facilitating calcium and phosphorus absorption.

Epiphyseal Plate

A region of cartilage tissue that exists at the ends of long bones in children and adolescents, promoting longitudinal growth of the bone through cell division.

Proliferation

The rapid increase in the number or amount of something, particularly referring to the rapid multiplication of cells in biological contexts.