Which of the following is an example of the life-cycle motive for saving?
A. Pat puts $400 per month in his 401(k) retirement account.
B. Chris keeps $15,000 in a money market account to pay expenses in case he loses his job.
C. Jordan sets aside $200 per month in case she has to pay for a new roof for her house.
D. Gerry and Terry put $2,000,000 in a trust fund that will go to their children when they die.
Answer: A
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Suppose the exchange rate for the U.S. dollar falls. This could be caused by
A) a decrease in U.S. import demand. B) an increase in the world demand for U.S. exports. C) an increase in the U.S. interest rate differential. D) a fall in the expected future exchange rate.
Full employment is not considered to be zero unemployment, because
A) some people do not want a job. B) people do not find jobs instantaneously. C) some cyclical unemployment always exists. D) there are not enough jobs for everyone who wants one.