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Overall, permanent income increases are 0 fully, while temporary income increases are 0 fully. The reason is that the net effect on savings is C
Overall, permanent income increases are 0 fully, while temporary income increases are 0 fully. The reason is that the net effect on savings is C for permanent income increases, while the effect on savings will be c if the temporary income increase happens today, or C if the temporary income increase will happen tomorrow
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