If Consumers Correctly Anticipate Their Future Incomes

question 56

Multiple Choice

If consumers correctly anticipate their future incomes:

• A) the saving rate will be high when consumers anticipate a boom.
• B) the saving rate will be low when consumers anticipate a boom.
• C) the saving rate will be low when consumers anticipate a recession.
• D) they will be disappointed because future income can never be correctly forecasted.

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Definitions:

Cohort

A group of individuals sharing a common factor (e.g., age, experience) within a specified period, often studied to identify patterns over time.

Longitudinal

A research design that involves repeated observations of the same variables over short or long periods of time.

Cross-sectional

An observational study type that examines data collected from a population or a representative sample at one particular point in time.

Cross-sectional

A research design that analyzes data from a population, or a representative subset, at one specific point in time.