Which of the Following Is NOT Consistent with the Permanent

question 199

Multiple Choice

Which of the following is NOT consistent with the Permanent Income Hypothesis?

• A)The theory would predict that people's consumption would be greater than their income until their mid to late 20s
• B)A person who won the lottery would spend only a small part of their winnings in the first year
• C)Consumption is smaller than income when people reach old age
• D)People gear their consumption to their expected earnings more than to their current income

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Definitions:

Kubler-Ross

Kubler-Ross refers to Elisabeth Kübler-Ross, a psychiatrist known for her pioneering work on the five stages of grief.

Adjustment

The psychological process of adapting or coping with new, challenging, or changing environments or situations.

Dying

The process of approaching death or the cessation of life.

Kubler-Ross

A psychiatrist known for developing the Kubler-Ross model, which outlines five stages of grief that patients may go through when faced with terminal illness.