Which of the following will have the largest increase on current consumption?

Group of answer choices

An agent who obeys the permanent income hypothesis receives an expected salary bonus of one dollar.

An agent who knows that taxes will increase one dollar in the future receives a tax break of one dollar in the current period.

An agent is worried she will lose a dollar of income this period, so she engages in precautionary saving.

An agent with a binding borrowing constraint unexpectedly finds a dollar on the floor.

Which of the following statements about aggregate consumption data is false?

Group of answer choices

From 1970 to 2015, household debt as a fraction of U.S. GDP has generally been rising.

From 1970 to 2015, the personal saving rate has generally declined in the United States.

Recently, China's saving rate has been rising, which is consistent with predictions of the permanent-income hypothesis.

From 1970 to 2015, U.S. households have generally increased their consumption.

Suppose the economy is composed of some households that obey the permanent income hypothesis as well as some households that are very sensitive to changes in income. Then, an expected 1 percent change in aggregate income will definitely raise aggregate current consumption by 1 percent.

Group of answer choices

True

False