Under what circumstances are people likely to spend a higher percentage of any additional income?

Question

Quizplus · Accepted Answer

When people believe that the increase in income is permanent, they are more likely to increase their spending habits as they perceive that their overall income has increased for the long term. Temporary income increases may be saved or used to pay off debts, rather than spent. The size of the increase is not as relevant as the perception of its permanence.

Under What Circumstances Are People Likely to Spend a Higher