Which of the following is an example of the precautionary motive for saving?
A. Jordan sets aside $200 per month in case she has to pay for a new roof for her house.
B. Every month, Chris puts $400 into his saving account so that he can buy a new car in a few years.
C. Pat puts $400 per month in his 401(k) retirement account.
D. Gerry and Terry put $2,000,000 in a trust fund that will go to their children when the parents die.
Answer: A
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Transfer payments are not included in GDP because
A) their market value cannot be accurately determined. B) they do not generate additional income. C) they are not purchases of goods or services. D) their value is included in government expenditure.
People who are risk neutral are more likely to engage in tax evasion than people who are risk loving.
A. True B. False C. Uncertain
If the price elasticity of demand for a good is 0.25, then a 20 percent decrease in price results in a
a. 0.0625 percent increase in the quantity demanded. b. 4 percent increase in the quantity demanded c. 5 percent increase in the quantity demanded. d. 80 percent increase in the quantity demanded.
Although state and local taxes are highly progressive, federal taxation is predominantly regressive.
Answer the following statement true (T) or false (F)