Consumption smoothing refers to ________.
A)the impact of future income on current consumption and of current income on future consumption
B)the constancy of consumption over time
C)the impact of current consumption on future income and of future consumption on current income
D)the tendency of consumers to adopt similar spending habits

Question

Quizplus · Accepted Answer

Consumption smoothing refers to the practice of maintaining a relatively stable level of consumption over time, despite fluctuations in income. This is achieved by adjusting current consumption based on expectations of future income, or by saving or borrowing to support future consumption needs.

Consumption Smoothing Refers to ________