According to the neoclassical model ___________ over their lifetime,however one study showed that ___________ at retirement.This puzzle was solved when two economist tested the neoclassical model using __________.
A)hold consumption constant;consumption rises sharply;purchases of RVs.
B)slow their consumption;consumption rises;data from Brazil
C)consumption smooth;consumption falls 17 percent;food consumption
D)don't maximize lifetime utility;they have zero income;dividend receipts
E)rely on transitory income;the discount factor is one;cost minimization

Question

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According to the neoclassical model, individuals smooth their consumption over their lifetime, however, one study showed that consumption falls 17 percent at retirement. This puzzle was solved when two economists tested the neoclassical model using food consumption data, indicating choice C as the correct answer.

According to the Neoclassical Model ___________ Over Their Lifetime,however One