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According to the Permanent Income Hypothesis (PIH), what should a consumer do if she receives news that she will be promoted in two years (and her salary will be doubled)? Will her consumption increase in two years?

PLEASE ALSO PROVIDE THE ANSWER FOR THE VICE VERSA SITUATION WHERE SHE MIGHT HAVE BEEN DEMOTED OR THE SALARY DECREASED

(DETAILED ANSWERS FOR BOTH PLEASE)

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Chika Ilonah
Chika IlonahLv10
29 Sep 2019
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