The life-cycle hypothesis suggests that people base their consumption on their ________ incomes.
A) current
B) average lifetime incomes rather than their current
C) temporary
D) future
E) past

Question

Quizplus · Accepted Answer

The life-cycle hypothesis proposes that people base their consumption on their average lifetime incomes rather than their current incomes, as individuals aim to smooth their lifetime consumption patterns.

The Life-Cycle Hypothesis Suggests That People Base Their Consumption on Their