Suppose you are working as an intern at a large financial firm with an annual salary of $30 000, but you are guaranteed a salary increase to $85 000 at the end of the internship. In general, we can expect that
A) your current level of saving falls and your supply of financial capital to the economy rises in anticipation of the higher future income.
B) your current level of saving rises in anticipation of the higher future income.
C) your current level of saving rises because there is a positive relationship between household saving and future income.
D) your current level of saving is certain to be positive.
E) your current level of saving falls and your supply of financial capital to the economy decreases in anticipation of the higher future income.
Correct Answer:
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