Preferences for steady consumption paths over variable consumption paths mean that
A) any permanent change in an individual's disposable income must generate either a change in the desired bequest or a comparable change in consumption.
B) the applicable marginal propensity to consume out of a permanent change in an individual's disposable income must be close to 1.
C) any temporary change in an individual's disposable income must generate only a small change in yearly consumption if it is to be spread out smoothly over a foreseeable lifetime.
D) all of the above.
E) a and c only.
Correct Answer:
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