When people expect their income to be lower in the future, they will be:
A) more inclined to save.
B) less inclined to save.
C) unaffected in their present choices.
D) People only react and change their savings decisions based on recent history.

Question

Quizplus · Accepted Answer

When people expect their income to be lower in the future, they tend to save more as a precautionary measure. This is because they want to ensure they have enough money to cover expenses during the time of lower income. Therefore, they will be more inclined to save.

When People Expect Their Income to Be Lower in the Future