An explanation for the low saving rate in the United States consistent with the demonstration effect includes:
A)relatively generous 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)highly-developed financial systems making it easy to buy homes with down payments under 15 percent.
D)large and persistent capital gains.

Question

Quizplus · Accepted Answer

The demonstration effect suggests that Americans have a low rate of saving because they pattern their behavior after the low-saving people they live around.

An Explanation for the Low Saving Rate in the United