Question: Is the life-cycle consumption (permanent income hypothesis) model persistent with your believes, and what have you observed? Compare the model with reality on how do

Is the life-cycle consumption (permanent income hypothesis) model persistent with your believes, and what have you observed?

Compare the model with reality on how do we make our decisions in our daily life.

1- People prefer to smooth their consumption over time rather than experiencing feast.

2- people are impatient.

3- people are forward looking when they make their current choices.

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