According to Modigliani's Life-Cycle Hypothesis, the Consumption Function Shifts Upward

question 117

Multiple Choice

According to Modigliani's life-cycle hypothesis, the consumption function shifts upward as _____ increases.

• A) income
• B) wealth
• C) the marginal propensity to consume out of income
• D) the number of years until retirement

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Definitions:

Loss on Sale

The financial loss incurred from selling an asset for less than its carrying amount on the books.

Brokerage Fee

A fee charged by a broker for executing transactions or providing specialized services.

Common Stock

A type of equity security that represents ownership in a corporation and entitles its holders to a claim on part of the company’s assets and earnings.

Gain or Loss

The financial result from a transaction that results in receiving more or less money than originally invested or spent.