Which of the following is not true of a change in dividend payments?

Question

Quizplus · Accepted Answer

All the statements (A, B, C) are based on the premise that a change in dividend payments does not significantly alter a household's economic decisions in terms of permanent income or the trade-off between work and leisure, which is a simplification or assumption rather than a universally true statement. Therefore, stating that there is no income or substitution effect in all these contexts is not accurate in real-world scenarios, making D the correct choice as it implies all the given statements are not true of a change in dividend payments.

Which of the Following Is Not True of a Change