By the nature of consumer ________,it is reasonable to treat most of the expenditure on them as a form of saving rather than consumption,which it what it takes in permanent-income and life-cycle models to make the saving ratio ________ with rising income.
A)nondurables,rise
B)services,fall
C)services,rise
D)durables,rise
E)durables,fall

Question

Quizplus · Accepted Answer

Durables are long-lasting goods like cars, appliances, and furniture, and they tend to be purchased less frequently than other products. By the nature of consumer durables, it is reasonable to treat most of the expenditure on them as a form of saving rather than consumption. This is because they are considered long-term investments that provide utility over an extended period. As a result, the saving ratio increases with rising income.

By the Nature of Consumer ________,It Is Reasonable to Treat