Refer to the following figure when answering
Figure 16.2: Consumption Function
-An implication of Figure 16.2 is that consumers:
A) smooth consumption
B) are risk takers
C) save all their income in period 1
D) are risk neutral
E) always consume $\bar c$

Question

Refer to the following figure when answering  
Figure 16.2: Consumption Function 
-An implication of Figure 16.2 is that consumers:
A) smooth consumption 
B) are risk takers 
C) save all their income in period 1 
D) are risk neutral 
E) always consume $\bar c$

Quizplus · Accepted Answer

Consumers smooth consumption to maintain a stable level of consumption over time, avoiding large fluctuations in their consumption patterns.

Refer to the Following Figure When Answering Figure cˉ\bar ccˉ

Refer to the Following Figure When Answering
Figure $\bar c$