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Empirically, we observe that consumption expenditure tends to vary less than income over a person's lifetime. (i) Using an appropriate and fully labelled diagram explain
Empirically, we observe that consumption expenditure tends to vary less than income over a person's lifetime. (i) Using an appropriate and fully labelled diagram explain how and why such consumption smoothing can occur. (ii) In light of the effects of COVID-19 on the macroeconomy, how might consumption be maintained at pre-virus levels?
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