(Answered) Question 43 options:a) is a consumption smoother.b) follows the Rational Rule for Consumers.c) is a…

➤ How does the Rational Rule for Consumers affect the marginal propensity to consume?
The Rational Rule instructs consumers to equalize marginal utility per dollar across periods given preferences and constraints. If people face liquidity limits or uncertainty, the marginal propensity to consume from current income increases. Thus rational behavior can imply either low or high MPC depending on credit access, expectations, and available savings.