Consumption smoothing is
A)increasing consumption in high-earning years in order to offset decreased consumption in low-earning years.
B)unnecessary because individuals receive public pensions in retirement.
C)reducing consumption in high-earning years in order to increase consumption in low-earning years.
D)consuming the same amount throughout your lifetime.

Question

Quizplus · Accepted Answer

Consumption smoothing involves reducing consumption during high-earning years to save and increase consumption during low-earning years, ensuring a stable consumption pattern over time.

Consumption Smoothing Is