If $c _ { \text {future } } c _ { \text {today } }$ , then: A) $\beta ( 1 + R ) 1$ and consumption grows C) $\beta

Question

If $c _ { \text {future } } > c _ { \text {today } }$ , then: A) $\beta ( 1 + R ) < 1$ and consumption shrinks B) $\beta ( 1 + R ) > 1$ and consumption grows C) $\beta < 0 < ( 1 + R )$ and you decide to save D) $y _ { \text {today } } < y _ { \text {future } }$ , because you make higher income in the future E) $\bar { X } = 0$ , because you have drawn your savings down to zero

Quizplus · Accepted Answer

If future consumption is greater than today's consumption, it implies that the present value of future consumption is higher, which is consistent with $\beta (1 + R) > 1$, indicating that consumption grows.

If cfuture >ctoday c _ { \text {future } } > c _ { \text {today } }cfuture ​>ctoday ​

If $c _ { \text {future } } > c _ { \text {today } }$