In the Lifecycle Theory of Savings,the Sequence of Behavior Is

question 20

Multiple Choice

In the lifecycle theory of savings,the sequence of behavior is as follows:

• A) borrow,dissave,save.
• B) borrow,save,dissave.
• C) save,borrow,dissave.
• D) save,dissave,borrow.

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Definitions:

Damage Cost

The monetary cost associated with the harm done to goods in an economy, which can result from disasters, accidents, or intentional acts.

Negative Externality

An adverse effect suffered by a third party as a result of an economic transaction in which they had no involvement.

Internalize

The process of incorporating the cost of externalities into the decision-making process of firms or individuals.

Marginal Social Cost

Marginal social cost is the total cost to society of producing an additional unit of a good, including both private costs and any external costs.