Which of the Following Statements Is True

question 83

Multiple Choice

Which of the following statements is true?

• A)According to the permanent income hypothesis,a person who received a windfall of say $100,000 would spend most of it that year.
• B)As disposable income rises,induced consumption falls.
• C)The minimum amount that people will spend if disposable income is zero is called induced consumption.
• D)A rapid increase in the prices of residential housing results in an increase in consumption due to the wealth effect.

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