According to Friedman,a primary determinant of a consumer's current consumption is
A) current employment.
B) current levels of GDP.
C) rate of expected savings in the second period.
D) permanent income.
E) temporary income.

Question

Quizplus · Accepted Answer

Friedman's permanent income hypothesis suggests that a consumer's current consumption is determined primarily by their permanent income rather than their temporary income or current employment. Permanent income is the average expected income over an extended period of time and is seen as a better indicator of a consumer's ability to consume over the long-term.

According to Friedman,a Primary Determinant of a Consumer's Current Consumption