Author Question: The life cycle and permanent income theories of consumption share which of the following features? ... (Read 51 times)

Mollykgkg · **on:** Jun 30, 2018

The life cycle and permanent income theories of consumption share which of the following features?

A) Consumption spending depends on income, rather than wealth.
B) Consumption spending should fluctuate widely from year to year.
C) Consumers look ahead to the future in making current spending decisions.
D) all of the above
E) none of the above

Question 2

Based on our understanding of the IS-LM model that takes into account dynamics, we know that an increase in government spending will cause

A) a gradual increase in i and gradual increase in Y.
B) an immediate increase in Y and immediate drop in i.
C) an immediate increase in i and no initial change in Y.
D) a gradual increase in i and an immediate increase in Y.