Question

How do the life-cycle and permanent-income hypotheses resolve the seemingly contradictory pieces of evidence regarding consumption behavior?

Answer 1

In this question there is a case of life cycle and permanent income hypothesis which are helpful in resolving the seemingly contradictory pieces of evidence regarding consumption behaviour of a consumer.
Permanent income hypothesis is a Theory which is based on consumer spending and which states that people generally span the money at a particular level of consistent and with their expected and estimated long term average income so here consumer has to determined they are permanent income level so that they can easily analyse the value of expenditure on a particular period of time permanent income hypothesis is really very important to determined the consumption level in the economy because on the basis of this hypothesis the consumption values can easily be determined.
Life cycle hypothesis is also important concept in relation with the consumption and the consumer behaviour for conservation the life cycle hypothesis is basically a Theory which states that individuals for consumers are seeking towards this month consumption over a period of time and here income plays an important role in deciding the consumption level therefore it is also an important concept in regarding the consumer behaviour.
So in conclusion there is a close relationship between the income and the consumption over a period of time.