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72. Consumption theory suggests that individuals and households tend to be emulative. Thus, following an economic or financial setback, their spending patterns tend to ratchet

72. Consumption theory suggests that individuals and households tend to be "emulative." Thus, following an economic or financial setback, their spending patterns tend to "ratchet" back to those they enjoyed before the setbacks. These notions are consistent with: (a) the permanent income hypothesis; (b) the relative income hypothesis; (c) determination of a short-term consumption function; (d) dissaving during working years.

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