Ted and Rose are saving more today because they want to make sure that their children will inherit a large sum of money when they die.This is an example of the ________ motive for saving.

Question

Quizplus · Accepted Answer

The fact that Ted and Rose are saving more today with the intention of leaving their children a large sum of money when they die indicates that their motive for saving is a bequest motive. The bequest motive is driven by the desire to bequeath wealth or assets to family members, friends, or charitable causes after death. This motive is separate from the life-cycle motive, which is about saving to meet future consumption needs, and the precautionary motive, which is about saving for unexpected events.

Ted and Rose Are Saving More Today Because They Want