Consumption smoothing refers to
A)the tendency of consumers to seek an income path over time that is smoother than consumption.
B)balance savings with consumption over time.
C)the tendency of all consumers to choose the same amount of current consumption.
D)the tendency of consumers to seek a consumption path over time that is smoother than income.
E)consumer's concerns about going heavily into debt.

Question

Quizplus · Accepted Answer

Consumption smoothing refers to the tendency of consumers to seek a consumption path over time that is smoother than income. This means that consumers will try to maintain a relatively stable level of consumption even if their income fluctuates. They may do this by saving when their income is high and spending when their income is low, for example.

Consumption Smoothing Refers to