Economics · Consumption Theories

Consider the following statements about the Ratchet Effect in Duesenberry's theory: I. When income falls, consumption does not fall proportionately because households resist reducing their established living standards. II. During a fall in income, APC rises and MPC falls. III. The ratchet effect implies the short-run consumption function is proportional. IV. The ratchet effect arises because consumption habits formed at high income levels are difficult to abandon. Which of the above statements are CORRECT?