The Permanent-Income Hypothesis Seeks Primarily to Explain the

question 91

Multiple Choice

The permanent-income hypothesis seeks primarily to explain the

• A)observed long-term constancy of the saving ratio.
• B)observed variation in the short-term saving ratio.
• C)unimportance of transitory income changes.
• D)All of the above are correct.

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Definitions:

Reasonably Possible

A term used in accounting and law to indicate that a future event or condition has a chance of occurring.

Liability

A company's financial debt or obligations that arise during the course of its business operations.

Probable Loss

An estimated loss from a contingent liability that is likely to occur and can be reasonably estimated.

Reasonably Possible

Describes a level of likelihood that something might occur, under consideration in areas like assessments of contingent liabilities.