What theory describes a pattern of early borrowing followed by a period of saving and then dissaving late in a worker's lifetime?
A) the lifecycle theory of savings
B) the career theory of dissaving
C) the demand theory of borrowing
D) the theory of cyclical smoothing

Question

Quizplus · Accepted Answer

The theory described is the lifecycle theory of savings, which suggests that individuals borrow early in life to finance education and purchasing assets such as a home, save during their working years, and then dissave in retirement.

What Theory Describes a Pattern of Early Borrowing Followed by a Period