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Title: Senior Software Engineer

Essay Details

Subject: History
Author: Jackie B
Date: April 24, 2014
Level: University
Grade: A
Length: 2 / 470
No of views: 0
Essay rating: good 0, average 0, bad 0 (total score: 0)

Essay text:

Friedman concluded that the individual will consume a constant proportion of his/her permanent income; and that low income earners have a higher propensity to consume; and high income earners have a higher transitory element to their income and a lower than average propensity to consume. In Friedman's permanent income hypothesis model, the key determinant of consumption is an individual's real wealth, not his current real disposable income...

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Permanent income is determined by a consumer's assets; both physical (shares, bonds, property) and human (education and experience). These influence the consumer's ability to earn income. The consumer can then make an estimation of anticipated lifetime income. The theory suggests that consumers try to smooth out consumer spending based on their estimates of permanent income...

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