Holding everything else constant, the less wealth a household has
A) the less it will consume, both now and in the future.
B) the more it will consume now, but the less it will consume in the future.
C) the less it will consume now, but the more it will consume in the future.
D) the more it will consume, both now and in the future.

Question

Quizplus · Accepted Answer

Households with less wealth tend to consume less both in the present and in the future because they have fewer resources available to spend. Wealthier households can afford to spend more and save more, which can lead to increased consumption in the future as well.

Holding Everything Else Constant, the Less Wealth a Household Has