If two households have the same disposable income in the current year, the household with the
A) higher expected future income will consume a larger portion of its current income today.
B) lower expected future income will consume more today while it has the money.
C) lower expected future income will spend a larger portion of its current income on consumption today because it will increase its saving in the future.
D) none of the above

Question

Quizplus · Accepted Answer

Households with higher expected future income are likely to consume more today because they anticipate having more income in the future to cover expenses or save.

If Two Households Have the Same Disposable Income in the Current