Many economists believe that a family bases its spending decisions on its average income rather than on transitory income.

Name: Many economists believe that a family bases its spending decisions on its average income rather than on transitory income.
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This is known as the permanent income hypothesis, which suggests that households base their spending decisions on their long-term or permanent income levels, rather than on short-term, unpredictable income fluctuations.

Many Economists Believe That a Family Bases Its Spending Decisions