If annual labour income is YL and years of working life is WL, then following formula belongs to which…
Life cycle, (3): C=(WL/NL)*YL when initial wealth, interest/discounting and bequests are absent and annual consumption is level. The more general model includes wealth and…
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If annual labour income is YL and years of working life is WL, then following formula belongs to which consumption Hypothesis ?
C = (WL / NL) × YL
(Where NL – Number of years of life)
Answer and explanation
Correct answer C
Life cycle, (3): C=(WL/NL)*YL when initial wealth, interest/discounting and bequests are absent and annual consumption is level. The more general model includes wealth and time-varying earnings.
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RPSC Assistant Professor (College Education)