The government is considering a mandatory savings program that forces people to save 8% of their income each year for retirement. What behavioral biases might be used as a justification for such a program? (Choose all that apply.)
a. Limited cognitive ability, preventing people from being able to accurately estimate how much an investment early in one's career will grow.
b. Limited willpower,
preventing people from being able to give up the pleasure of current consumption for the benefits of consumption later in retirement.
c. Limited commitment power, leading the government to use the funds for current expenditures.
d. Risk aversion, leading people to consume now rather than wait until the uncertain future.
a, b
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Refer to Table 7-6. Which country has an absolute advantage in producing belts?
A) Estonia B) Morocco C) both countries D) neither country
The employer is responsible for managing funds in an employee's defined contribution pension plan
Indicate whether the statement is true or false
The dead-weight loss from an excise tax
a. is greater if demand is perfectly inelastic. b. is caused by a shift in consumer preferences when the tax is raised. c. is the lost surplus that results from higher prices and lower output resulting from the tax. d. is of little concern to policy makers since all excise taxes are "sin" taxes. e. is the difference between consumer surplus and producer surplus.
Japan is
a. an advanced economy, and over the past century its rate of economic growth has been higher than that of the United States. b. an advanced economy, and over the past century its rate of economic growth has been lower than that of the United States. c. a middle-income country, and over the past century its rate of economic growth has been higher than that of the United States. d. a middle-income country, and over the past century its rate of economic growth has been lower than that of the United States.