According to the permanent income hypothesis,consumption spending depends largely on ________.
A)current income
B)the savings rate
C)a consumer's lifetime resources
D)the level of current income plus the value of the assets owned by the household

Question

Quizplus · Accepted Answer

The permanent income hypothesis suggests that consumers base their consumption on their lifetime resources rather than on their current income or savings rate. Therefore, the best choice is C, a consumer's lifetime resources.

According to the Permanent Income Hypothesis,consumption Spending Depends Largely on ________