Households Will Choose to Save More If

question 68

Multiple Choice

Households will choose to save more if

• A)expected future income decreases.
• B)current disposable income increases.
• C)current disposable income decreases.
• D)both A and B are correct.
• E)both A and C are correct.

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Definitions:

Bilateral Contract

A bilateral contract is a mutually binding agreement in which each party makes a promise to the other, such as a promise to perform a service in exchange for payment.

Illusory Promise

Describes a statement or agreement that appears to be a promise but is too vague or has terms that allow the promisor to avoid any real obligation.

Consideration

Something of value given by both parties to a contract that induces them to enter into the agreement to exchange mutual performances.

Student Debt

Loans accumulated through financing higher education, often a significant financial burden for graduates.