The Next Questions Refer to the Following

question 46

Multiple Choice

The next questions refer to the following.
Consider an individual who enters adulthood and the labor force at age 18, expects to work 5 years at a real income of $10,000 per year, anticipates earning a real income of $40,000 per year from age 23 to 63, expects to retire with a $10,000 annual pension, and live until age 78. Suppose the interest rate is zero, and the individual seeks perfectly smooth consumption across his adult lifetime.
-Suppose there are no borrowing constraints but the individual wishes to leave a bequest of $120,000 (after adjusting for inflation) to heirs. Then annual consumption should be

• A) $12,000
• B) $16,000
• C) $20,000
• D) $24,000
• E) $28,000

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Definitions:

Due Process

A legal principle that ensures fair treatment through the normal judicial system, especially as a citizen's entitlement.

Ethical Rules

Guidelines designed to outline acceptable behaviors and actions for individuals and organizations, based on moral principles.

Unrestrained Zeal

Excessive enthusiasm or eagerness that is not limited or controlled.

Justice System

A framework of legal institutions, laws, and practices aiming to ensure fairness, resolve disputes, and punish wrongdoing.