According to the life-cycle theory of consumption, people tend to consume more than they earn during their ________ years.
A) main working
B) early
C) later
D) both B and C

Question

Quizplus · Accepted Answer

According to the life-cycle theory of consumption, people tend to consume more than they earn during their early years (when they are starting out) and later years (during retirement). This is because they may have borrowing capacity during their early years and accumulated savings during their later years, which they can use to finance their consumption. Additionally, during their main working years, people typically earn their highest income and tend to save more for future consumption.

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