Multiple Choice
A consumer spending excessively today, intending to start saving for retirement tomorrow, but deciding to continue spending when tomorrow arrives is an example of:
A) an income effect offsetting a substitution effect.
B) time-inconsistent preferences.
C) spending out of permanent income, but not out of transitory income.
D) an intertemporal budget constraint.
Correct Answer:
Verified
Correct Answer:
Verified
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