The idea of the ________ is that people make lifetime consumption plans.
A) life-cycle theory of consumption
B) invisible hand
C) law of demand
D) classical theory of investment

Question

Quizplus · Accepted Answer

The life-cycle theory of consumption suggests that people make lifetime consumption plans, taking into account their income and assets throughout their life span. It states that individuals tend to save money when they are young and have lower incomes, and then gradually increase consumption as their income and asset levels rise, before reducing consumption in retirement. The other options, such as the invisible hand, law of demand, and classical theory of investment, do not directly relate to the concept of lifetime consumption plans.

The Idea of the ________ Is That People Make Lifetime