Suppose that Angelo and Sonia each win $500 in a charity raffle. Angelo spends his winnings on a new ipad. Sonia saves her winnings. Which of the following is correct?
a. Both Angelo's and Sonia's behavior suggest that they base their purchasing decisions on transitory income.
b. Angelo's behavior suggests that he bases his purchasing decisions on transitory income rather than permanent income. Sonia's behavior suggest that she bases her purchasing decisions on permanent income rather than transitory income.
c. Angelo's behavior suggests that he bases his purchasing decisions on permanent income rather than transitory income. Sonia's behavior suggests that she bases her purchasing decisions on transitory income rather than permanent income.
d. Both Angelo's and Sonia's behavior suggest that they base their purchasing decisions on permanent income.
b
You might also like to view...
All economists agree that World War II (1941–45) was responsible for ending the Great Depression
Indicate whether the statement is true or false
Full employment is defined by most economists as the minimization of
a. cyclical unemployment. b. frictional unemployment. c. seasonal unemployment. d. structural unemployment.
In general, as the amount of labor input decreases, the amount of output
a. increases. b. decreases. c. remains constant. d. decreases only if the capital stock also decreases.
Ceteris paribus, with a fixed exchange rate, if Americans decide to buy more Japanese-made television sets, this causes a market ________ of Japanese currency and creates a balance-of-payments ________ for the United States.
A. shortage; deficit B. surplus; surplus C. surplus; deficit D. shortage; surplus