If consumers correctly anticipate their future incomes:
A)the saving rate will be high when consumers anticipate a boom.
B)the saving rate will be low when consumers anticipate a boom.
C)the saving rate will be low when consumers anticipate a recession.
D)they will be disappointed because future income can never be correctly forecast.

Question

Quizplus · Accepted Answer

If consumers anticipate a boom, they expect higher future incomes, leading them to save less in the present, thus resulting in a lower saving rate.

If Consumers Correctly Anticipate Their Future Incomes