Economics · Life Cycle Hypothesis
Consider the following statements regarding Modigliani's Life Cycle Hypothesis (LCH): A. Individuals plan consumption to smooth utility over their entire lifetime. B. Savings are positive during working years and dissaving occurs during retirement. C. Aggregate savings rate depends on economic growth rate and demographic age structure. D. In LCH, APC increases continuously as income rises in the long run. Which of the statements given above are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A and C only
- 2B and D only
- 3A, B, C and D
- 4A, B and C only✓
Correct answer
A, B and C only
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