An explanation for the low saving rate in the United States consistent with the life-cycle reason for saving 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

In the United States, with its highly developed financial system, people can buy homes with down payments of 15 percent or less of the purchase price. The ready availability of mortgages with low down payments reduces the need to save for the purchase of a home.

An Explanation for the Low Saving Rate in the United