Gordon characterizes Modigliani as a prominent activist yet several implications of his life cycle hypothesis support the non-activists. One of these implications is
A) transitory increases in income associated with the business cycle are not expected to last a lifetime so current consumption is relatively stable.
B) permanent increases in income associated with the business cycle are not expected to last a lifetime so current consumption is relatively stable.
C) transitory increases in income associated with the business cycle are not expected to last a lifetime so current consumption is relatively unstable.
D) transitory increases in income associated with the business cycle are to last a lifetime so current consumption is relatively stable.
A
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Why were the U.S. government budget deficits of the 1980s and early 1990s so unusual from a historical point of view?
A) It was the first time the U.S. government had ever run deficits. B) In the past, deficits were usually that large only in wartime. C) It was the first time that deficits were accompanied by very high rates of inflation. D) It was the first time that deficits diverted funds from other productive uses, such as investment in modern equipment.
If eight workers can manufacture 70 tables per day and nine workers can manufacture 90 tables per day,
a. the marginal product of hiring the ninth worker is 20 tables b. the marginal product of hiring the ninth worker is 10 tables c. the marginal revenue associated with the ninth worker is $90 if nine tables sell for $10 each d. there are diminishing marginal returns to labor, starting with the ninth worker e. average revenue is rising