Which of the following is a characteristic of the 'Life-Cycle Hypothesis' of consumption?
A. Saving is independent of age
B. Consumption depends only on current income
C. Individuals plan consumption over their entire lifetime
D. Only permanent income matters and age is irrelevant
Answer: Option C
Solution (By JKSSB Mock Tests)
The life-cycle hypothesis, associated with Modigliani, posits that individuals smooth consumption over their lifetime by saving during working years and dissaving during retirement.
Explanation:
Commercial banks accept demand deposits (current accounts), savings deposits and time (fixed) deposits. Equity deposits are not a standard category of bank deposits.
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