An Individual's Intertemporal Budget for Current Consumption Includes Her

question 26

Multiple Choice

An individual's intertemporal budget for current consumption includes her:

• A)current income only.
• B)current income and the present value of future income.
• C)current income and the future value of future income.
• D)present value of future income only.

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Definitions:

Consumption

Families or individuals partaking in the use of goods and services.

Interest Rate

The percentage of a sum of money charged for its use, often expressed on an annual basis.

Income

The financial benefit achieved regularly through employment or committing capital.

Utility Function

A mathematical representation in economics that assigns a value to each possible choice or bundle of goods to reflect the satisfaction or happiness a consumer derives from it.