A consumer is a borrower if
A) optimum current consumption is less than current disposable income.
B) optimum current consumption is greater than current disposable income.
C) future disposable income is greater than current disposable income.
D) the consumer's indifference curves are relatively steep.
E) the consumer's indifference curves are positively sloped.

Question

Quizplus · Accepted Answer

A consumer is a borrower if their optimum current consumption (i.e. the most preferred combination of goods and services) is greater than their current disposable income. In other words, they are spending more than they earn and need to borrow to maintain their desired level of consumption.

A Consumer Is a Borrower If