Which of the Following Is True Regarding the Effect Expected

question 3

Multiple Choice

Which of the following is true regarding the effect expected future income has on saving?
I. As expected future income increases, saving increases.
II. Young people typically save very little.
III. Middle aged people, earning higher incomes, are not very big savers.

• A) II and III
• B) I and III
• C) III only
• D) II only

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Definitions:

Great Depression

A severe worldwide economic downturn that lasted from 1929 until the early 1940s, marked by massive unemployment and deflation.

1933

A pivotal year during the Great Depression characterized by significant banking crises and the implementation of New Deal policies by President Franklin D. Roosevelt in the United States.

1929

Refers to the year marked by the stock market crash in October, which contributed to the onset of the Great Depression.

Stagflation

An economic condition characterized by slow economic growth, high unemployment, and rising prices.