According to consumption smoothing behaviour, which of the following is incorrect for the effects of an increase in future income? Savings increase. O Permanent income increases. O Future consumption increases. Savings decrease. Current consumption increases.
According to consumption smoothing behaviour, which of the following is incorrect for the effects of an increase in future income? Savings increase. O Permanent income increases. O Future consumption increases. Savings decrease. Current consumption increases.
Chapter9: Aggregate Demand
Section: Chapter Questions
Problem 4.8P
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![According to consumption smoothing behaviour, which of the following is incorrect
for the effects of an increase in future income?
Savings increase.
Permanent income increases.
Future consumption increases.
Savings decrease.
O Current consumption increases.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0591f0ff-54d3-4fa2-a21d-b394ca5fc4fc%2Fffeec6e8-5b79-4ff9-a97d-71528d633de6%2F0ofh15i_processed.jpeg&w=3840&q=75)
Transcribed Image Text:According to consumption smoothing behaviour, which of the following is incorrect
for the effects of an increase in future income?
Savings increase.
Permanent income increases.
Future consumption increases.
Savings decrease.
O Current consumption increases.
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