When it is assumed that people desire a smooth pattern of consumption enjoyment,if not consumption expenditure,this limits the permanent-income and life-cycle hypotheses to predicting the demand for consumer
A)durables.
B)durables and services.
C)services and nondurables.
D)nondurables and durables.
E)nondurables.

Question

Quizplus · Accepted Answer

The permanent-income and life-cycle hypotheses suggest that people aim to smooth consumption over time, focusing on services and nondurables, which provide ongoing consumption enjoyment rather than one-time utility like durables.

When It Is Assumed That People Desire a Smooth Pattern