Question

If there is an anticipated rise in income, a consumption smoother will exhibit _____ in consumption, and a hand-to-mouth consumer will exhibit _____ in consumption.

Answer 1

The difference in the level of consumption of a consumption smoother and a hand-to-mouth consumer based on anticipated increase in income.

• If there is an anticipated rise in income, a consumption smoother will exhibit increase in consumption, and a hand-to-mouth consumer will exhibit no change in consumption.

• Consumption smoothing can be defined as a process of achieving a balance between expenses on today's needs and saving for tomorrow (future). It is used to regulate spending and saving during different phases of life (increase or decrease in income.

• Hand-to-mouth consumer is a consumer who spends all his income on consumption. He doesn't save because he earns low income.

Read more:

brainly.com/question/9745324