If the permanent income hypothesis is true, why would inequality measured by current consumption tend to be

Question:

If the permanent income hypothesis is true, why would inequality measured by current consumption tend to be smaller than inequality measured by current income?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Exploring Economics

ISBN: 9781439040249

5th Edition

Authors: Robert L Sexton

See More Books

Question Posted: Feb 07, 2013 06:10 AM

See More Questions

How does the permanent income hypothesis affect the multiplier model? Why?
Why do investors tend to pay a smaller premium for a warrant as the price of the stock goes up?
Why do you suppose that smaller firms tend to rely on bank financing while larger companies are more apt to sell bonds in financial markets?
The maker of a $10,000, 8%, 90-day note receivable failed to pay the note on the due date of June 30. What accounts should be debited and credited by the payee to record the dishonored note...
Calculate the equilibrium pressure of CO2 due to the decomposition of barium carbonate (BaCO3) at 25C.
Halcyon Lines is considering the purchase of a new bulk carrier for $8 million. The forecasted revenues are $5 million a year and operating costs are $4 million. A major refit costing $2 million will...
Give reasons for the following: (i) I.C. Engine cylinders are required to be cooled. (ii) Carburettor and spark plug are provided on petrol engines. The indicated power of a four stroke cycle petrol...
Carleton Closures, Inc., manufactures clamps used in the overhead bin latches of several leading airplane models. Greg Poole, president of Carleton Closures, Inc., has gathered the following cost...
Discuss, contrast and compare, the issues surrounding animal consciousness and machine consciousness. How are these issues alike and how different? Do they inform us differently about our...
Use the following information to answer this question: Windswept, Incorporated 2021 Income Statement ($ in millions) Net sales. Cost of goods sold Depreciation Earnings before interest and taxes...
a. If every individual earned the same total income over his or her lifetime, why would we still see inequality at a given point in time? b. Why could means-tested income redistribution be described,...
If the marginal utility of income falls with added income, why cant we be sure that redistribution from higher to lower income individuals would increase total utility?
If the target in-stock probability increases, then the expected time between stockouts a. Increases. b. Remains the same. c. Decreases. d. Could increase or decrease
63. [5 points] As part of the program in Java, use the if-else-if statement to code the following flowchart: assign grade as a single character A when the score is greater than 89; otherwise, assign...
8. If D=A- B, calculate the uncertainty in SD. 8D = 0.02 0.14 0.20 a. b. c. 1
The Central Bank of Nigeria (CBN) has introduced a new policy on cash-based transactions which stipulates a cash handling charge on daily cash withdrawals that exceed N500,000 for Individuals and...
sec x In the figure to the right, the equation of the solid curve is y = and 2 the equation of the dashed curve is y = 2 cos 2x. Determine the area of the shaded region. The area of the shaded region...
You have built some intelligent projections shown below: 1. What is the Revenue CAGR (compounded annual growth rate) over this projection period? 2. What is the EBITDA CAGR (compounded annual...
Starting with the given displacement form (15.7.8), explicitly justify relations (15.7.9) (15.7.12) in the gradient dislocation Example 15.16 Equation 15.7.8 Equation 15.7.9 Equation 15.7.12 Data...
A container holds 2.0 mol of gas. The total average kinetic energy of the gas molecules in the container is equal to the kinetic energy of an 8.0 10-3-kg bullet with a speed of 770 m/s. What is the...
Suppose that disposable income, consumption, and saving in some country are $200 billion, $150 billion, and $50 billion, respectively. Next, assume that disposable income increases by $20 billion,...
A consumer has income of $3,000. Wine costs $3 per glass, and cheese costs $6 per pound. Draw the consumers budget constraint. What is the slope of this budget constraint?
Draw a consumers indifference curves for wine and cheese. Describe and explain four properties of these indifference curves.
Pick a point on an indifference curve for wine and cheese and show the marginal rate of substitution. What does the marginal rate of substitution tell us?
What cognitive processes underlie the formulation of visionary narratives, and how can leaders leverage storytelling techniques to evoke emotional resonance, foster buy-in, and drive transformative...
What role does stakeholder engagement play in co-creating and refining organizational visions that resonate with diverse interests, values, and aspirations, thereby fostering collective ownership and...
List a TV show that you enjoy. Choose a group of 3-5 characters that have something in common. Call this set A. List the characters in roster notation. explain their commonality. Choose a second...

If the permanent income hypothesis is true, why would inequality measured by current consumption tend to be

Question:

Step by Step Answer:

If the permanent income hypothesis is true people would draw on the...View the full answer

Exploring Economics

Students also viewed these Economics questions