Harry's employer offers a "Holiday Account," which means $50 a month is taken out of Harry's paycheck and deposited into this account throughout the year. In December, Harry can take the money out of the account to spend during the holiday season. This type of account:
I. ignores the fungibility of money.
II. will always help employees to make the best financial decisions.
III. is irrational.

Question

Quizplus · Accepted Answer

I. The account ignores the fungibility of money because it treats money saved specifically for the holidays as being different from other savings, even though money is interchangeable. III. It's not necessarily irrational; it can be a useful tool for people who struggle with saving, acting as a forced savings plan to ensure they have funds for the holiday season. II is incorrect because it doesn't always lead to the best financial decisions for everyone, as it depends on individual financial situations and preferences.

Harry's Employer Offers a "Holiday Account," Which Means $50 a Month