According to the life-cycle theory of consumption, people tend to consume ________ they earn during their main working years.
A) more than
B) less than
C) the same as
D) an amount unrelated to what

Question

Quizplus · Accepted Answer

According to the life-cycle theory of consumption, individuals plan their consumption and savings behaviour over their life cycle. They aim to smooth out their consumption in the best possible manner over their entire lifetimes, expecting to save during their working years and dissave (spend savings) during retirement. Therefore, they tend to consume less than they earn during their main working years to save for retirement.

According to the Life-Cycle Theory of Consumption, People Tend to Consume