The horizontal intercept of the intertemporal budget constraint is referred to as
A)The present value of lifetime income
B)The current value of future income
C)The future value of lifetime income
D)The future value of present income

Question

Quizplus · Accepted Answer

The horizontal intercept of the intertemporal budget constraint represents the present value of lifetime income, because it is the maximum amount that an individual can consume in the present while still being able to consume the same amount over their entire lifetime.

The Horizontal Intercept of the Intertemporal Budget Constraint Is Referred