In the U.S., the amount in savings contributed to IRAs rose from $239 billion in 1992 to $3,667 billion by 2005, while overall savings actually dropped from low to lower. Evidence suggests that, in the economy as a whole, increased savings in these retirement accounts:
A) are the negative result of a change in wage levels and a higher work effort.
B) the result of personal preferences and intertemporal budget constraints.
C) are being offset by negative savings or less savings in other kinds of accounts.
D) the result of a higher interest rates and preferences about present consumption.

Question

Quizplus · Accepted Answer

The increase in savings in IRAs, despite an overall drop in savings, suggests that the money being saved in IRAs is being offset by reduced savings in other types of accounts, rather than indicating an increase in total savings.

In the US, the Amount in Savings Contributed to IRAs Rose from Rose