The forward-looking consumption model assumes that people make consumption decisions based on
A)their mood.
B)their current income.
C)their anticipation of their future income.
D)their income taxes in the current year.
E)their perceptions of other people's behavior.

Question

Quizplus · Accepted Answer

The forward-looking consumption model assumes that people make consumption decisions based on their anticipation of their future income, taking into account factors such as job security and potential job promotions. This model shows that people tend to save more when they expect their income to increase in the future, rather than spending all of their current income.

The Forward-Looking Consumption Model Assumes That People Make Consumption Decisions