If people can borrow and lend to perfectly smooth out their lifetime living standards, then ?

A. transitory income is a good measure of the distribution of living standards
B. none of these answers
C. permanent income is a good measure of the distribution of living standards.
D. life-cycle income is a good measure of the distribution of living standards.
E. current annual income is a good measure of the distribution of living standards.

Correct Answer: permanent income is a good measure of the distribution of living standards. ✔

Last Updated: June 11, 2019