Question

example for permanent income hypothesis?​

Answer 1

Answer:

Defining the Permanent Income Hypothesis

Economic thought at the time assumed people consumed only based on their current after-tax income. For a simple example, consider a college student. A college student borrows a lot of money to go into a (hopefully) moderate amount of debt.

Explanation:

Answer 2

Answer:

if a worker is aware that he or she is likely to receive an income bonus at the end of a particular pay period, it is plausible that said worker’s spending in advance of that bonus may change in anticipation of the additional earnings. However, it is also possible that workers may choose to not increase their spending based solely on a short-term windfall. They may instead make efforts to increase their savings, based on the expected boost in income