A model of savings that accounts for the fact that individual savings serve to smooth consumption over future uncertainties can be defined as a(n):

Question

Quizplus · Accepted Answer

The concept of smoothing consumption over future uncertainties is central to the precautionary savings model. This model accounts for the fact that individuals save as a way to protect themselves against unforeseen events such as job loss or illness, and thus helps them manage their future consumption more effectively. The other options (B, C, and D) do not fully capture this aspect of savings behavior.

A Model of Savings That Accounts for the Fact That