Assuming life cycle hypothesis, let a person starts working when he is 20 years old, works until the age of 60 and expects to die at the age of 70. If this person earns, say Rs. 1.50 lac annually when he is 20-30 years, Rs. 2 lac annually when he is 30-45 years, and Rs. 3 lac annually when he is 40- 60 years, then his life time average propensity to consume is
A. 0.60
B. 0.70
C. 0.80
D. 0.90
Answer:C
Assuming life cycle hypothesis, let a person starts working when he is 20 years old, works until the age of 60 and expects to die at the age of 70. If this person earns, say Rs. 1.50 lac annually when he is 20-30 years, Rs. 2 lac annually when he is 30-45 years, and Rs. 3 lac annually when he is 40- 60 years, then his life time average propensity to consume is
A. 0.60 B. 0.70 C. 0.80 D. 0.90