14.
The life-cycle hypothesis and Permanent Income Hypothesis theories of consumption:
A)
are attempts to discredit the Keynesian consumption theory.
B)
believe that consumers do not have any autonomous consumption.
C)
assert that consumption is a necessity of life and does not depend on income.
D)
all of the above.
E) none of the above.
Letter C is my answer I just want to double check if its correct. Thank you.
The correct answer is E) none of the above.
The life-cycle hypothesis and the Permanent Income Hypothesis are not attempts to discredit the Keynesian consumption theory (option A).
These theories do not claim that consumers do not have any autonomous consumption (option B).
They also do not assert that consumption is a necessity of life and does not depend on income (option C).
These theories instead propose that individuals base their consumption decisions on their expected lifetime income and financial resources, rather than just current income.
To double-check if your answer of C) is correct, let's go through each option and explain the theories of consumption mentioned.
A) The life-cycle hypothesis and Permanent Income Hypothesis theories of consumption are not attempts to discredit the Keynesian consumption theory. Rather, they are alternative theories that provide different explanations for how individuals make consumption decisions over their lifetime.
B) Both the life-cycle hypothesis and the Permanent Income Hypothesis theories of consumption recognize that consumers have autonomous consumption. Autonomous consumption refers to the minimum level of consumption that individuals have regardless of their income. It is the consumption necessary for basic needs such as food, shelter, and clothing.
C) This statement is not accurate. The life-cycle hypothesis and Permanent Income Hypothesis theories do consider that income plays a role in consumption decisions. They argue that consumption is not solely determined by the current level of income but is influenced by an individual's expected average income over their lifetime.
D) Since option A and B are incorrect, D) cannot be the correct answer.
E) Based on the explanations above, the correct answer is E) none of the above.
Therefore, option C) is not the correct answer. The correct answer should be E) none of the above.