What Type of Relationship Exists Between Expected Future Income and Consumption

question 63

Multiple Choice

What type of relationship exists between expected future income and consumption?

• A) Negative
• B) Positive
• C) Indirect
• D) Constant

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Definitions:

Income

The financial earnings received by an individual or entity, typically measured over a certain period of time.

Utility-Maximizing

A principle in economics wherein individuals or entities make choices that result in the highest level of satisfaction.

R&D Expenditures

Money spent on research and development activities to innovate and improve products or processes.

Expected Return

The anticipated profit or loss from an investment, considering both the probability and the impact of all possible outcomes.