A Reduction in an Individual's Future Income Will Cause

Multiple Choice

A reduction in an individual's future income will cause:

A) consumption to fall in both time periods because consumption in both years are normal goods.
B) a fall in consumption in the future period but not the current period since the price of future consumption relative to current consumption did not change.
C) consumption to fall in the future period and rise in the current period as the consumer substitutes more current consumption for the future consumption.
D) an increase in current consumption if interest rates are high enough to induce consumption.