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

question 1

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.For any interest rate and $Y _ { 1 } < Y _ { 2 }$ ,the person will ____ in the first period.

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

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Definitions:

Target Customers

A specific group of consumers at whom a company aims its products and services, identified by characteristics like age, gender, income, and interests.

Demographics

The statistical characteristics of human populations, such as age, gender, income, and education, used especially to identify consumer markets.

Tapestry Analysis

A method of consumer segmentation that uses demographic and geographic data to identify, understand, and target specific consumer groups based on their behaviors, preferences, and needs.

Upper-Income

Refers to individuals or households that earn more than the average income level, often associated with higher purchasing power and consumption patterns.