Suppose that Carlos prefers current consumption to future consumption. Thus, Carlos is said to have a low time preference.
Consider a country where life expectancy is 95 years. Two citizens, Carlos, 89 years old, and Deborah, 44 years old, are relatively healthy for their ages.
1: Assuming that Carlos and Deborah maximize their life-time consumption, which of the following statements is most plausible, all else equal?
a. Carlos has a much lower time preference than Deborah has.
b. Carlos and Deborah are indifferent between saving for the future and current consumption.
c. Carlos and Deborah have very similar time preferences.
d. Carlos prefers current consumption to future consumption to a greater degree than Deborah does.
.
Suppose that Carlos prefers current consumption to future consumption-.docx
1. Suppose that Carlos prefers current consumption to future consumption. Thus, Carlos is said to
have a low time preference.
Consider a country where life expectancy is 95 years. Two citizens, Carlos, 89 years old, and
Deborah, 44 years old, are relatively healthy for their ages.
1: Assuming that Carlos and Deborah maximize their life-time consumption, which of the
following statements is most plausible, all else equal?
a. Carlos has a much lower time preference than Deborah has.
b. Carlos and Deborah are indifferent between saving for the future and current consumption.
c. Carlos and Deborah have very similar time preferences.
d. Carlos prefers current consumption to future consumption to a greater degree than Deborah
does.
