According to the life-cycle hypothesis ________.
A)households consume on the basis of their current income and liabilities
B)household consumption as a percentage of income varies over one's lifetime
C)current income is a function of future income
D)cycling to work everyday allows one to live a longer life

Question

Quizplus · Accepted Answer

The life-cycle hypothesis suggests that household consumption patterns vary throughout one's lifetime. This means that as individuals go through different stages of life, such as starting a family or retiring, their consumption as a percentage of income may change. The hypothesis does not address current income being a function of future income, nor does it relate to cycling to work.

According to the Life-Cycle Hypothesis ________