According to the life-cycle theory of consumption, people tend to consume more than they earn during their early working years.

Question

Quizplus · Accepted Answer

According to the life-cycle theory, individuals tend to consume more during their younger years and save less for the future as they have a higher earnings potential in the future. As they approach retirement, they tend to consume less and save more to maintain their standard of living in old age.

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