The permanent income hypothesis is consistent with cross-section and time series data because
A. Higher-income households are savers since their current income includes positive transitory components.
B. Higher-income households are savers since their current income includes negative transitory components.
C. Lower-income households are savers since their current income includes negative transitory components.
D. Lower-income households are savers since their current income includes positive transitory components.
Answer:A
The permanent income hypothesis is consistent with cross-section and time series data because
A. Higher-income households are savers since their current income includes positive transitory components. B. Higher-income households are savers since their current income includes negative transitory components. C. Lower-income households are savers since their current income includes negative transitory components. D. Lower-income households are savers since their current income includes positive transitory components.