In reference to the consumption-smoothing theory,a person typically saves the most:
A) during working years.
B) during retirement years.
C) as an infant.
D) as a full-time student.

Question

Quizplus · Accepted Answer

The consumption-smoothing theory states that people prefer to smooth out their consumption over their entire lifetime. This means that during their working years, individuals are more likely to save more in order to prepare for retirement or potential future economic hardships. During retirement years, individuals are spending the savings they accumulated during their working years. Hence, option A is the correct answer.

In Reference to the Consumption-Smoothing Theory,a Person Typically Saves the Most