According to the life cycle model discussed in the textbook, people tend to borrow while young, pay off debt and build wealth in their middle age, and live off savings during their retirement.
Answer the following statement true (T) or false (F)
True
According to the life cycle theory of retirement, the young borrow for education and to buy homes. The middle-aged pay off their mortgages and build savings. Then in old age, people use their savings to pay for medical and living costs. See Figure 18.1 in the textbook.
You might also like to view...
If an economy is operating at a point inside the production possibilities curve, then
A) society's resources are being inefficiently utilized. B) the curve will move to the left. C) society's resources are being used to produce too many consumer goods. D) economic policy must implemented to slow growth of the economy further.
Which of the following is a definition of the real interest rate in a world with a positive inflation rate?
a. The percentage increase in the borrower's purchasing power from taking a loan b. The percentage decrease in the borrower's dollars from taking a loan c. The percentage increase in the lender's purchasing power from making a loan d. The percentage increase in the lender's dollars from making a loan e. The percentage decrease in the lender's dollars from making a loan
An example of a beneficial externality is
A. a vaccination to prevent a communicable disease. B. loud music from a cool house party. C. a sandwich shop that adds a free pickle with each order. D. a pasture that all ranchers can freely graze their cattle on.
A market equilibrium is only efficient if:
A. all relevant costs and benefits are reflected in the market supply and demand curves. B. output is distributed equitably among consumers. C. consumer surplus and producer surplus are both zero. D. the consumer surplus and the producer surplus associated with a given transaction are equal.