According to the Wealth Theory of Consumption of Ando and Modigiliani the consumption is the function of:
A. Life time expected income of the consumer
B. Present value of consumer's future expected income
C. Future value of assets
D. Present value of assets
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Consumption and investment has come up 74 times in 7 exams since 2005.
This question is on Relative income, permanent income and life-cycle hypotheses, part of Consumption and investment in Macroeconomics.
Why consumption reacts less than one-for-one to temporary income changes.
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Question from the UGC-NET 2026 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.