The path of ________ over a lifetime is likely to be much more stable than the path of ________.
A) consumption; income
B) income; consumption
C) saving; consumption
D) saving; income

Question

Quizplus · Accepted Answer

The path of consumption over a lifetime is likely to be much more stable than the path of income. This is because individuals tend to smooth out their consumption over their lifetime, borrowing in times of low income and saving in times of high income to maintain a relatively stable level of consumption.

The Path of ________ Over a Lifetime Is Likely to Be