According to Friedman's Permanent-Income Hypothesis, the Marginal Propensity to Consume

question 88

Multiple Choice

According to Friedman's permanent-income hypothesis, the marginal propensity to consume out of permanent income is ______ the marginal propensity to consume out of transitory income.

• A) greater than
• B) less than
• C) equal to
• D) one minus

Identify the factors influencing the choice between base pay and performance pay.

Comprehend the implications of compensation design on employee behavior and organizational structure.

Recognize the importance of legal and fiscal considerations in shaping compensation strategies.

Understand the components of the compensation mix and their roles.

---

Definitions:

Substance Abuse

The harmful or hazardous use of psychoactive substances, including alcohol and illicit drugs.

Substance Related Costs

Financial, social, and health-related expenses incurred due to the use and abuse of drugs and alcohol.

Marijuana

A psychoactive drug from the Cannabis plant, used for medical or recreational purposes.

Illegal Drugs

Substances whose manufacture, possession, or use is prohibited by law due to their potential for abuse or harm.