${?}_5$ Consumption and Saving $-$ End of Chapter Problem

Which of the following people are consumption smoothing, and which are not?

Sharon Tirabassi won $$10$ million in the Ontario lottery in

$2004.$ By $2015,$ she had burnt through almost all the winnings, was riding the bus to part$-$time jobs, and was living in a rental property.

Karyn takes out modest student and personal loans to pay for living expenses while she finishes her degree. She plans to get an accounting degree and enter the workforce, making about $$50,000$ a year, and will eventually earn close to six figures.

Sharon was:

Consumption smoothing

Not consumption smoothing Karyn is:

Not consumption smoothing

Consumption smoothing