Which of the following statements is true?

A) According to the permanent income hypothesis,a person who received a windfall of say $100,000 would spend most of it that year.
B) As disposable income rises,induced consumption falls.
C) The minimum amount that people will spend if disposable income is zero is called induced consumption.
D) A rapid increase in the prices of residential housing results in an increase in consumption due to the wealth effect.

Permanent Income Hypothesis

A theory suggesting that people's consumption choices are based on their long-term income expectations rather than their current income.

Induced Consumption

Consumer spending that increases as disposable income rises, and decreases as disposable income falls, unrelated to the level of interest rates.

Wealth Effect

The change in spending that accompanies a change in perceived wealth, typically when home values or investment portfolios increase.