Most people would prefer
A)higher current consumption relative to future consumption.
B)higher future consumption relative to current consumption.
C)to smooth consumption over their lifetime.
D)to match current consumption to current income.

Question

Quizplus · Accepted Answer

Most people prefer to smooth their consumption over their lifetime, which means balancing their current consumption with future consumption to maintain a stable standard of living. This approach involves saving during high-earning years to use for low-earning years or retirement. It helps individuals avoid overspending during good times and financial struggles during difficult times. Option A is not ideal since it can lead to financial instability in the future, while option B may leave individuals without enough present resources to meet their needs. Option D can be problematic since it doesn't account for long-term financial planning.

Most People Would Prefer