A permanent increase in income leads to
A) a small increase in current consumption.
B) a large increase in current consumption.
C) a small decrease in future consumption.
D) a large decrease in future consumption.
Question 2
Fred has always been known as the rich kid. Strictly speaking, this must mean that ________.
A) Fred has a lot of cash
B) Fred's income is quite high
C) Fred won the lottery before he was legally eligible
D) Fred has a flashy wardrobe
E) Fred has a lot of wealth