Typically,consumers respond to an increase in (expected)future income by ________.
A)shifting the budget constraint to the left
B)increasing both current and future consumption
C)saving more to increase future wealth
D)waiting until the income is received before changing their consumption behavior

Question

Quizplus · Accepted Answer

When consumers expect an increase in future income, they tend to increase their current consumption as well as adjust their future consumption plans accordingly. This is because they believe they will have more disposable income in the future, so they may as well spend more now.

Typically,consumers Respond to an Increase in (Expected)future Income by ________