________ is when households save to hedge against uncertainty.
A) Precautionary saving
B) A bond purchase strategy
C) Consumption smoothing
D) Utility maximization
E) Credit constraint

Question

Quizplus · Accepted Answer

Precautionary saving is when households save money in order to have a buffer in case of unexpected events such as job loss, illness, or other financial emergencies. This type of saving is done as a way to hedge against uncertainty and to ensure that the household can maintain their standard of living even in difficult times.

________ Is When Households Save to Hedge Against Uncertainty