Which of the Following Is NOT Consistent with the Permanent

question 226

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 at least 50 percent of their winnings in the first year.
• C)Consumption is greater 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:

Spontaneous Recovery

The reappearance of a conditioned response after a period of apparent extinction, without further conditioning.

Variable-Ratio Reinforcement Schedule

A reinforcement schedule in which the number of responses required for a reward varies, leading to high and consistent rates of response.

Fixed-Interval Reinforcement

A reinforcement schedule in which rewards are delivered at consistent, predetermined intervals of time, promoting a pattern of behavior.

Tantrums

Explosive emotional outbursts, often characterized by yelling, crying, and anger, typically seen in children but can occur at any age.