In 1314 annual income for ages 25 to 85 is given graphically. People sometimes spend
Chapter 5, Problem 13(choose chapter or problem)
In 1314 annual income for ages 25 to 85 is given graphically. People sometimes spend less than their income (to save for retirement) or more than their income (taking out a loan). The process of spreading out spending over a lifetime is called consumption smoothing. (a) Find the average annual income for these years. (b) Assuming that people spend at a constant rate equal to their average income, when are they spending less than they earn, and when are they spending more?
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