Suppose You Are Working as an Intern at a Large

question 32

Multiple Choice

Suppose you are working as an intern at a large financial firm with an annual salary of $30 000,but you are guaranteed a salary increase to $85 000 at the end of the internship.In general,we can expect that

• A)your current level of saving falls and your supply of financial capital to the economy decreases in anticipation of the higher future income.
• B)your current level of saving rises because there is a positive relationship between household saving and future income.
• C)your current level of saving is certain to be positive.
• D)your current level of saving rises in anticipation of the higher future income.
• E)your current level of saving falls and your supply of financial capital to the economy rises in anticipation of the higher future income.