According to Franco Modigliani's Life-Cycle Hypothesis, the Principal Determinant(s) of Consumption

question 21

Multiple Choice

According to Franco Modigliani's life-cycle hypothesis, the principal determinant(s) of consumption is (are) :

• A) permanent income.
• B) income and wealth.
• C) transitory income.
• D) wealth.

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Definitions:

Profit Margin

A financial metric that measures the degree to which a company or a business activity makes money, expressed as a percentage of revenue.

Sales

The transactions involving the exchange of goods or services for money, representing a critical source of revenue for businesses.

Net Income

This is the amount of profit left after all operating expenses, taxes, and interest are deducted from total revenues.

Taxes

Mandatory financial charges or levies imposed by a government on individuals or entities to fund public expenditures.