Suppose a Person's Preferences Are to "Consumption Smooth",which Means They $C _ { 1 } = C _ { 2 }$

question 26

Multiple Choice

Suppose a person's preferences are to "consumption smooth",which means they wish to get $C _ { 1 } = C _ { 2 }$ for all incomes and interest rates $Y _ { 1 } = Y _ { 2 }$ .For any interest rate and ,the person will ____ in the first period.

• A)borrow
• B)save
• C)neither borrow nor save

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