Consider Consumption in Two Periods $c _ { 1 }$ And $c _ { 2 }$

Multiple Choice

Consider consumption in two periods, $c _ { 1 }$ and $c _ { 2 }$ . Consumption smoothing implies:

A) if taxes fall today, they will rise tomorrow
B) people would consume $c _ { 1 } = c _ { 2 }$
C) people would rather consume the average of $c _ { 1 }$ and $c _ { 2 }$
D) transitory income is zero
E) people always know their future incomes and adjust consumption accordingly