Which of the following is TRUE regarding the effect expected future income has on saving?
I. As expected future income increases, saving increases.
II. Young people typically save very little.
III. Middle aged people, earning higher incomes, are not very big savers.
A) I and III
B) II only
C) III only
D) II and III

Question

Quizplus · Accepted Answer

II is true because young people often have lower incomes and higher immediate expenses, leading to lower savings. Expected future income increases do not necessarily lead to increased saving; it depends on various factors including current needs, financial planning, and psychological factors. Middle-aged people often save more due to higher incomes and planning for retirement, contradicting statement III.

Which of the Following Is TRUE Regarding the Effect Expected