Refer to the following figure when answering the following questions.
Figure 16.4: Personal Saving Rate: 1990-2010
-Consider Figure 16.4. A possible cause for the fall in the saving rate between 1990 and 2005 is:
A) precautionary saving.
B) consumption smoothing.
C) the changing composition of households' savings portfolios.
D) increasing competition among commercial banks.
E) less access to credit markets.

Question

Refer to the following figure when answering the following questions.
Figure 16.4: Personal Saving Rate: 1990-2010 
-Consider Figure 16.4. A possible cause for the fall in the saving rate between 1990 and 2005 is:
A) precautionary saving. 
B) consumption smoothing. 
C) the changing composition of households' savings portfolios. 
D) increasing competition among commercial banks. 
E) less access to credit markets.

Quizplus · Accepted Answer

The changing composition of households' savings portfolios could lead to a fall in the saving rate if households shift towards investments that are not counted as savings in traditional measures.

Refer to the Following Figure When Answering the Following Questions