Refer to the following figure when answering
Figure 16.2: Consumption Function
-In Figure 16.2, point c is equal to the ________ and implies ________.
A) utility of the average of $c _ { 1 }$ and $c _ { 2 }$ ; consumption smoothing
B) utility associated with consuming $c _ { 1 }$ ; risk neutrality
C) utility of consumption; Ricardian equivalence
D) average utility of $c _ { 1 }$ and $c _ { 2 }$ ; a borrowing constraint
E) utility of the average of $c _ { 1 }$ and $c _ { 2 }$ ; a low discount factor

Question

Refer to the following figure when answering  
Figure 16.2: Consumption Function 
-In Figure 16.2, point c is equal to the ________ and implies ________.
A) utility of the average of $c _ { 1 }$ and $c _ { 2 }$ ; consumption smoothing 
B) utility associated with consuming $c _ { 1 }$ ; risk neutrality 
C) utility of consumption; Ricardian equivalence 
D) average utility of $c _ { 1 }$ and $c _ { 2 }$ ; a borrowing constraint 
E) utility of the average of $c _ { 1 }$ and $c _ { 2 }$ ; a low discount factor

Quizplus · Accepted Answer

Point c is equal to the utility of the average of $c _ { 1 }$ and $c _ { 2 }$ and implies consumption smoothing.

Refer to the Following Figure When Answering Figure c1c _ { 1 }c1​

Refer to the Following Figure When Answering
Figure $c _ { 1 }$