Holding Other Factors Constant, If Employers Automatically Enroll Employees in Retirement

question 20

Multiple Choice

Holding other factors constant, if employers automatically enroll employees in retirement savings programs in order to overcome psychological barriers to saving, then the real interest rate will ________ and the equilibrium quantity of saving and investment will ________.

• A)increase; increase
• B)increase; not change
• C)increase; decrease
• D)decrease; increase

---

Definitions:

Excludable

A property of a good or service wherein it is possible to prevent people who have not paid for it from having access to it.

Social Goods

Goods that benefit all members of society and whose consumption does not reduce their availability to others.

Nonrival

A characteristic of a good whereby its consumption by one individual does not reduce the amount available for consumption by others.

Strategic Behavior

Actions taken by firms or individuals with the aim of influencing the market or competitors to achieve a particular outcome or advantage.