In U.S.recessions,growth in total consumption is ________,which is ________ with the workings of the permanent-income and life-cycle hypotheses.
A)largely uninterrupted,perfectly consistent
B)largely uninterrupted,rather inconsistent
C)noticeably reduced,perfectly consistent
D)noticeably reduced,rather inconsistent

Question

Quizplus · Accepted Answer

In U.S. recessions, growth in total consumption is noticeably reduced, which is rather inconsistent with the workings of the permanent-income and life-cycle hypotheses. According to these hypotheses, consumption is driven by a smooth and predictable pattern of income over time, rather than by short-term fluctuations in income. Therefore, a noticeable reduction in consumption during a recession suggests that people are not behaving entirely in accordance with these theories.

In USrecessions,growth in Total Consumption Is ________,Which Is ________ with the the Workings

In USrecessions,growth in Total Consumption Is ,Which Is with the the Workings