Modern Forward-Looking Theories of Consumption

question 57

Multiple Choice

Modern forward-looking theories of consumption

• A) are founded on the pioneering work done by Milton Friedman and Franco Modigliani on the permanent income theory and the life cycle theory, respectively.
• B) are based on consumption depending on current disposable income, current wealth, and expected paths of disposable income and wealth in the future.
• C) assert that individuals make long-term consumption decisions each year, using as much information about the present and the future as possible.
• D) do not preclude individuals' changing consumption plans as new information presents itself.
• E) all of the above.

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Definitions:

Social Values

Cultural or societal norms and principles that guide individual and collective behavior and decision-making.

Universalistic

Pertains to principles or practices that are intended to be universally applicable or effective, regardless of cultural or contextual differences.

Conformist

An individual who follows established norms and practices, often prioritizing harmony and adherence to social or organizational standards.

Subjectivist

Pertaining to the philosophy that emphasizes the role of the individual's perceptions and feelings in creating their own reality.