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III. True or False. If True, mark True. If False, mark False and edit the phrase to be true. (8 pts) 1. The Permanent Income Hypothesis is not based on economics, but on sociology, when we assume that an individual is less concerned with absolute level of consumption, and more concerned with their level of consumption relative to their social class. 2. Keyne's Absolute Income Hypothesis uses marginal propensity to consume to describe how much consumption will change in response to a change in income. This theory was used to justify policies reallocating incomes to the wealthiest members of society, who are more likely to spend an additional dollar of income 3. In the early 1950s Modigliani developed the permanent income hypothesis based on the observation that people make consumption decisions based both on the resources available to them over their lifetime, and also based on their current stage of life. 4. Milton Friedman theorized that a change in expected lifetime income, rather than a change in temporary income, would affect a consumer's long term consumption patterns