Because People Can Borrow and Save to Smooth Out Life-Cycle

question 107

True/False

Because people can borrow and save to smooth out life-cycle changes in income, their standard of living in any year depends more on lifetime income than on that year's income.

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Definitions:

Fundamental Attribution Error

The tendency to overestimate the effect of personality or disposition and underestimate the influence of situational factors when explaining others' behaviors.

East Asians

People originating from countries in the eastern part of Asia, usually including China, Japan, and Korea, among others.

Americans

Residents or citizens of the United States of America.

Physically Attractive People

Individuals perceived to have physical features that are aesthetically pleasing or beautiful to others.