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When a consumption-smoothing household receives news about a future decrease in income, we expect them to: a. decrease consumption spending now, and save some of
When a consumption-smoothing household receives news about a future decrease in income, we expect them to:
a.
decrease consumption spending now, and save some of their current income for future use.
b.
keep consumption spending the same for now, and increase it after their income has increased.
c.
borrow to increase consumption spending now, in anticipation of the future increase in income.
d.
invest some of their current income now, and spend the earnings later.
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