Which one of the following is not an assumption of permanent income hypothesis ?

Group DiscussionCategory: EconomicsWhich one of the following is not an assumption of permanent income hypothesis ?
Pandey Vikash Gautam Staff asked 5 months ago

Which one of the following is not an assumption of permanent income hypothesis ?
(1) Transitory income can be both positive and negative.
(2) Permanent income depends on human and non-human wealth.
(3) Transitory consumption can be both positive and negative.
(4) Average propensity to consume is greater than marginal propensity to consume.

1 Answers
Pandey Vikash Gautam Staff answered 5 months ago

(4) Average propensity to consume is greater than marginal propensity to consume.