People smooth their consumption over their lifetime by:
A) saving.
B) borrowing.
C) both borrowing and saving.
D) neither borrowing nor saving.

Question

Quizplus · Accepted Answer

People can smooth their consumption over their lifetime by both borrowing and saving. Saving allows people to accumulate wealth that can be used to fund their future consumption, while borrowing allows them to access funds when they need them before they have had a chance to save enough. By combining saving and borrowing, people can smooth their consumption over their lifetime, avoiding sudden fluctuations in their standard of living.

People Smooth Their Consumption Over Their Lifetime By