RealTime Data Analysis Exercise The following table contains

Real-Time Data Analysis Exercise The following table contains income and consumption data from FRED* for the third quarter of 2017. Real-time data provided by Federal Reserve Economic Data (FRED), Federal Reserve Bank of Saint Louis. Title Value $16,451.85 billion $14,405.473 billiorn $13,429.116 billion Personal Income Disposable Personal Income Since personal consumption expenditures are exceeded by disposable income, the implication is that the third quarter of 2017 saw households engaged in

Solution

Here personal disposable income exceeds personal consumption expenditure. Thus according to the concept of intertemporal consumption or Life Cycle Income Hypothesis, a person can make choices depending on his current condition which will make way for his future options. Again, the intertemporal cosumption also explains about peoples preferances in relation to consumption and savings throughout his life.

Here as disposable income is higher, it can be said that the households are engaged in Savings/Lending.