According to the Life-Cycle Model, the Short-Run Consumption Function Will

question 1

Multiple Choice

According to the life-cycle model, the short-run consumption function will not continue to hold in the long run because:

• A) increases in wealth shift the short-run function upward.
• B) decreases in the average propensity to consume shift the short-run function downward.
• C) increases in income shift the short-run function upward.
• D) increases in the average life span shift the short-run function upward.

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Definitions:

Endings

The conclusion or final part of something, such as an event, story, or process, often marking the cessation of activities or the achievement of a goal.

Bottoming Out

A point at which an individual reaches their lowest state, often leading to a moment of clarity or change.

Emotional Burden

The emotional stress or weight carried by an individual, often due to difficulties or hardships.

Major Life Changes

Significant events or transitions in an individual’s life that can have a profound effect on their well-being and require substantial adaptation.