Which of the following statements concerning the relation among consumption, saving, and income over the life cycle is INCORRECT?
A)Individuals who have recently entered the labor force tend to consume more than they earn.
B)Individuals who are in their peak earning years tend to have positive savings.
C)Individuals who are retired tend to finance part of their consumption by borrowing.
D)Most households attempt to even out the amount they consume over their life cycles.

Question

Quizplus · Accepted Answer

It is incorrect that individuals who are retired tend to finance part of their consumption by borrowing. In fact, retired individuals tend to draw on their accumulated savings to finance their consumption.

Which of the Following Statements Concerning the Relation Among Consumption