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According to the life-cycle and permanent-income hypotheses, if future income rises permanently, current consumption:

1 Answer

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Answer:

b. rises.

Step-by-step explanation:

In the case when the future income increased on permanently basis so as per the life cycle and the hypothesis of permanent income the current income rises because in this case the people rises their level of consumption patterns over their lifecycle

Therefore in the given situation, the rises is the answer and the same is to be considered

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