Economics · Macroeconomics
The Life Cycle Hypothesis of consumption postulates which of the following statements? (A) Consumption is stable and smoothed throughout a lifetime. (B) Marginal propensity to consume out of permanent income is small. (C) Marginal propensity to consume out of transitory income is large. (D) It emphasizes how individuals maintain a stable standard of living over the course of life.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1(B) and (C) only
- 2(A) and (D) only✓
- 3(B), (C), and (D) only
- 4(A), (B), (C) and (D)
Correct answer
(A) and (D) only
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