According to the permanent-income theory, if individuals A and B have the same average annual income but A's income fluctuates greatly from year to year while B receives an almost even flow of income each year, then
A) A will spend less than B out of permanent income
B) B will spend less than A out of permanent income
C) A will weigh current income less heavily in making consumption decisions than B
D) B will weigh current income less heavily in making consumption decisions than A
E) A's consumption will always be less than B's
Correct Answer:
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