Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 9, Problem 12E
To determine
To write:
The reason behind economies with older population having consumption function with greater slope.
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The life cycle model of consumption argues that people consume and save in different proportions as they age. Seniors tend to consume more than save as their lives adjust to the realities of old age. Assuming the hypothesis is true, how would the aging of the very large baby boomer generation affect consumption and income?
What is the Euler equation for consumption, and what is its economicinterpretation?
If U.S. consumers become more optimistic about their future income and wealth, the consumption function will shift upward.
True
or
False
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