Which of the following is an example of the precautionary motive for saving?
A)Pat puts $400 per month in his 401(k)retirement account.
B)Jordan sets aside $200 per month in case she has to pay for a new roof for her house.
C)Gerry and Terry put $2,000,000 in a trust fund that will go to their children when the parents die.
D)Every month, Chris puts $400 into his saving account so that he can buy a new car in a few years.

Question

Quizplus · Accepted Answer

The precautionary motive is saving for unexpected life events. A new roof may be needed sooner rather than later, so Jordan is saving now to prepare for an unexpected event.

Which of the Following Is an Example of the Precautionary