According to Modigliani's Life-Cycle Hypothesis, If a Consumer Wants Equal

question 109

Multiple Choice

According to Modigliani's life-cycle hypothesis, if a consumer wants equal consumption in every year and the interest rate is zero, then the marginal propensity to consume out of wealth ______ as years ______ decrease.

• A) increases; of life remaining
• B) decreases; of life remaining
• C) increases; until retirement
• D) decreases; until retirement

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Definitions:

Retailers

Retailers are businesses or individuals that purchase goods from manufacturers or wholesalers and sell them directly to consumers.

Promotional Activities

Marketing efforts intended to increase awareness or sales of a product or service, often through discounts or advertising.

Profitable

A state where a business or investment generates more revenue than the expenses incurred, leading to a financial gain.

Retailers

Businesses that sell goods directly to consumers, acting as the final link in the supply chain.