If People Leave Bequests Primarily Because They Are Uncertain About

question 47

Multiple Choice

If people leave bequests primarily because they are uncertain about the timing of their deaths,

• A)the marginal propensity to consume out of a temporary change in income would tend to be higher than in the simple version of the LCH.
• B)unrealized capital gains from higher housing prices will probably lead to a higher consumption-to-income ratio than in the simple version of the LCH.
• C)increases in wealth from the stock market would be consumed over a longer time horizon than in the simple version of the LCH.
• D)A and C are both correct.

---

Definitions:

Variance

A statistical measure of dispersion that shows how much values in a data set differ from the mean.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of data values from the mean, used to assess the spread of a data distribution.

Statistics

Calculated numbers that summarize data and relationships among variables in a sample.

Z-score

A numerical measurement that describes a value's relationship to the mean of a group of values, expressed in terms of standard deviations from the mean.