In a country,very old and very young people spend more than their incomes.Yet in that same country,the people who are middle-aged tend to save for retirement.If this scenario is true,it best describes

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This scenario best describes consumption smoothing, which refers to the tendency of individuals to spread their consumption over their lifetime, rather than spending their entire income immediately. The middle-aged population, who are closer to retirement, tend to save more in order to smooth their consumption in retirement. On the other hand, the very old and very young populations may spend beyond their incomes due to limited income-earning capacity or greater dependence on others.

In a Country,very Old and Very Young People Spend More