According to the separation theorem, individuals choose consumption expenditures over time by choosing the one with the largest:
A)unconstrained utility.
B)constrained utility.
C)future value.
D)present value.

Question

Quizplus · Accepted Answer

The separation theorem posits that individuals make decisions based on constrained utility, which takes into account the limitations or constraints (such as budget constraints) they face when choosing how to allocate resources over time.

According to the Separation Theorem, Individuals Choose Consumption Expenditures Over