According to Friedman's permanent income hypothesis, which of the following statements about transitory income is true?
a. It reflects the unexpected gains of income are transitory income.
b. It reflects the income of people who have temporary employment.
c. People's consumption depends on transitory income.
d. It reflects the income of retired people.
e. Habitual losses (or gains) at gambling are transitory income.
A
You might also like to view...
Normative economics is
a. an event is explained according to the laws of economics. b. an explanation of the way things ought to be, the explanation involves a value judgement on the part of someone. c. the study of foreign countries. d. the study of our banking system.
Intermediation entities include which of the following?
(a) Life and fire insurance companies (b) Stock exchanges (c) Mutual saving banks (d) All of the above
When the slope of the total production curve begins to flatten:
A. the marginal product must be decreasing. B. diminishing marginal product must be occurring. C. additional inputs adds less to total production than the inputs added before. D. All of these are true.
If the economy experiences a recessionary gap then:
a. aggregate expenditures exceed the level of spending necessary to provide for full employment. b. Keynesian economics would recommend a reduction in government spending or an increase in taxes. c. Keynesian economics would recommend an increase in government spending or a decrease in taxes. d. the equilibrium level of output and income is above full employment.