Explanations for the High Saving Rate in China Consistent with the Life-Cycle

question 127

Multiple Choice

Explanations for the high saving rate in China consistent with the life-cycle reason for saving include:

• A)China's social safety net provides most people little in the way of retirement income.
• B)lifetime employment.
• C)the desire to leave resources to children who provide support and attention to parents in their old age.
• D)low unemployment rates in Japan.

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Definitions:

Resource Prices

The cost of inputs used in the production of goods and services, such as labor, capital, land, and raw materials.

Marginal Revenue Product

The extra income obtained through the use of an additional unit of a resource, for example, capital or labor.

Wage Rates

The amount of money paid to an employee by an employer for a unit of time worked or for a certain amount of work completed.

Labor Demand

Denotes the quantity of labor that employers are willing to hire at a given wage rate in a given time period.