Friedman measured "permanent" income by assuming that people adjusted their consumption on the basis of
A) an "error learning" process with respect to their expected income.
B) an adaptive expectation formation of their expected income.
C) transitory income and the level of income expected over a period of years in the future.
D) All of the above.
D
You might also like to view...
Refer to Figure 18-2. If the government imposes an excise tax of $1.00 on every unit sold, the government's revenue from the tax is represented by the area
A) (PaPc × Qa) if the supply curve is S0 and (PbPc × Qb) if the supply curve is S1. B) (PbPe × Qb) under either supply curve. C) (PaPd × Qa) if the supply curve is S0 and (PbPe × Qb) if the supply curve is S1. D) (PaPe × Qa) under either supply curve.
In order to survive in political office, politicians must be steadfast in their convictions and be unwilling to change their political platforms
a. True b. False
This graph depicts a tax being imposed, causing demand to shift from D1 to D2. The amount of tax revenue being generated by the tax imposed in the graph shown is:
A. area P2CAP4.
B. area P1DBP3.
C. area ABC.
D. area ABCD.
Why has there been an increase in the inequality of income?
a. The demand for skilled workers has declined. b. The demand for skilled workers has remained constant and the demand for unskilled workers has declined. c. The government policies went against the unskilled workers. d. The demand for skilled workers has increased and the demand for unskilled workers has not kept pace. e. The demand for unskilled workers has increased as they could be hired for lower wages.