Question

According to Classical economists, the permanent income hypothesis was an argument supporting their view that, during a recession, the economy would

Answer 1

Answer: tend to self correct and the decline would be cushioned.

Explanation:

The permanent income hypothesis is simply refered to as a theory that relates to consumer spending which states that individuals will spend money based on the disposable income that they expect in their lifetime.

According to Classical economists, the permanent income hypothesis was an argument supporting their view that, during a recession, the economy would tend to self correct and the decline would be cushioned.