The permanent income hypothesis implies that the effect of a ...

[mpobi80]

The permanent income hypothesis implies that the effect of a temporary tax cut on economic activity
 
  A) is greater than the effect of a permanent tax cut.
  B) is the same as the effect of a permanent tax cut.
  C) is smaller than the effect of a permanent tax cut.
  D) can be greater than or smaller than the effect of a permanent tax cut, depending on how the tax cut affects the government.

Question 2

People demand money for all of the following reasons EXCEPT
 
  A) it generates a rate of return. B) it is a medium of exchange to make payments.
  C) it is a store of value. D) it can meet unplanned expenditures.

[ApricotDream]

Answer to Question 1

C

Answer to Question 2

A