One of the implications of the intertemporal budget constraint is that:
A) current consumption does not have to equal current income
B) there can be income transfers between today and the future
C) lifetime consumption equals total wealth
D) All of these answers are correct.
E) None of these answers are correct.

Question

Quizplus · Accepted Answer

The intertemporal budget constraint shows the relationship between current and future consumption and income. It implies that current consumption does not have to equal current income, income transfers can occur between today and the future, and lifetime consumption equals total wealth. Therefore, option D is correct as all of these statements are true.

One of the Implications of the Intertemporal Budget Constraint Is