Suppose that Family A borrows money when its roof leaks.Suppose that Family B saves money when it wins $500 in a state lottery.Which of the following is correct?
A) Both Family A and Family B's spending habits suggest that they base their purchasing decisions on transitory income.
B) Family A's spending habits suggest that it bases its purchasing decisions on transitory income rather than permanent income.Family B's spending habits suggest that it bases its purchasing decisions on permanent income rather than transitory income.
C) Family A's spending habits suggest that it bases its purchasing decisions on permanent income rather than transitory income.Family B's spending habits suggest that it bases its purchasing decisions on transitory income rather than permanent income.
D) Both Family A and Family B's spending habits suggest that they base their purchasing decisions on permanent income.
Correct Answer:
Verified
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