If consumers experience an decrease in lifetime income, current spending will ________, current saving will ________, and future spending will ________.
A) decrease; decrease; decrease
B) increase; decrease; decrease
C) increase; decrease; increase
D) increase; increase; decrease
E) decrease; increase; increase

Question

Quizplus · Accepted Answer

When consumers experience a decrease in lifetime income, they will decrease their current spending in order to compensate for the loss. They will also decrease current saving as they have less income to set aside. Future spending will also decrease because with less income, they will have less money to spend in the future.

If Consumers Experience an Decrease in Lifetime Income, Current Spending