This topic contains a solution. Click here to go to the answer

Author Question: Macroeconomics (Read 34 times)


  • Guest
on: Dec 4, 2019
Think about your spending habits prior to college, during college, and what you expect after graduation.  How might your own financial decisions relate to the life-cycle theory of consumption?  Also consider how interest rates may affect your consumption choices.

Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert


  • Hero Member
  • Posts: 579
Reply #1 on: Dec 4, 2019
  • Undo Best Answer
  • According to the life-cycle theory of consumption, consumption decisions are based on permanent income only. As a college student, I consume more than I did when I was a high school student because my permanent income now is higher than it was in high school. Assuming I find a job upon graduation, my consumption will in turn increase, while at the same time begin to accumulate my earnings (begin to save) and stop saving once I retire. Depending on the interest-rates, it may change my outlook when purchasing a house or when obtaining a loan for a business venture. If the interest is too high, regardless of the principal I put in, the monthly fees may be too much to curb the costs of running a business or building my home.


    • Member
    • Posts: 216
    Reply 2 on: Dec 4, 2019


    • Member
    • Posts: 210
    Reply 3 on: Yesterday
    Wow, this really help


    Did you know?

    Over time, chronic hepatitis B virus and hepatitis C virus infections can progress to advanced liver disease, liver failure, and hepatocellular carcinoma. Unlike other forms, more than 80% of hepatitis C infections become chronic and lead to liver disease. When combined with hepatitis B, hepatitis C now accounts for 75% percent of all cases of liver disease around the world. Liver failure caused by hepatitis C is now leading cause of liver transplants in the United States.

    Did you know?

    Though “Krazy Glue” or “Super Glue” has the ability to seal small wounds, it is not recommended for this purpose since it contains many substances that should not enter the body through the skin, and may be harmful.

    Did you know?

    Cutaneous mucormycosis is a rare fungal infection that has been fatal in at least 29% of cases, and in as many as 83% of cases, depending on the patient's health prior to infection. It has occurred often after natural disasters such as tornados, and early treatment is essential.

    Did you know?

    Of the estimated 2 million heroin users in the United States, 600,000–800,000 are considered hardcore addicts. Heroin addiction is considered to be one of the hardest addictions to recover from.

    Did you know?

    The familiar sounds of your heart are made by the heart's valves as they open and close.

    For a complete list of videos, visit our video library