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Munze Munze
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6 years ago
Suppose an individual experiences a $20,000 increase in real income and the individual believes this increase in income is permanent. Economic theory suggests that this individual's current consumption will
A) remain unchanged.
B) increase by more than $20,000.
C) increase by at most $20,000.
D) decrease or remain unchanged, depending on the value of the real interest rate.
E) decrease, remain unchanged, or increase, depending on the value of the real interest rate.
Textbook 
Macroeconomics

Macroeconomics


Edition: 6th
Authors:
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Macroeconomics, 6/E (Blanchard, Johnson)
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vonCOLLINZOvonCOLLINZO
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Munze Author
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#2
5 years ago
Excellent answer!
Macroeconomics, 6/E (Blanchard, Johnson)
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