Problem
What assumption(s) regarding consumers' knowledge and behavior in the life-cycle- permanent-income hypothesis do we need to change in order for it to explain the presence of precautionary, or buffer-stock, saving? Do these assumptions, in your opinion, bring the model closer to or further from the world as you know it?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.