Explanations for the Low Saving Rate in the United States

question 20

Multiple Choice

Explanations for the low saving rate in the United States consistent with the life-cycle reason for saving include:

• A) relatively limited government assistance for the elderly and large down payments required for home purchases.
• B) households spending beyond their means to keep up with community standards
• C) well developed financial markets making it easy to borrow against home equity.
• D) confidence in future economic prosperity.

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Definitions:

Markup Percent

The markup on the original cost of goods intended to cover running costs and generate profit.

Selling Price

The amount of money a buyer pays to acquire a product or service from a seller.

Markup Percent

A percentage added to the cost price to determine the selling price.

Cost

Cost refers to the amount of money or resources expended to obtain a good or service, including production, materials, labor, and other expenses.