When people expect their income to fall in the future, they will be:
A) more inclined to save.
B) less inclined to save.
C) unaffected in their present choices.
D) Any of these could occur when income is expected to fall.

Question

Quizplus · Accepted Answer

When people expect their income to fall in the future, they become more cautious and tend to cut back on spending. Saving becomes a priority, as they want to have a buffer in case their income decreases. Therefore, they will be more inclined to save.

When People Expect Their Income to Fall in the Future