Final answer:
Andrew's income line might drop at age 30 due to a decrease in government benefits, changes in employment, or shifts in investment strategy. Economic events like recessions can also impact financial situations, necessitating changes in retirement plans.
Step-by-step explanation:
The dramatic drop in Andrew's income line as he reaches the age of 30 could be explained by several hypothetical scenarios. In economics, income patterns are influenced by a variety of factors, including employment changes, shifts in government benefits, and changes in investment strategy due to different life stages. For instance, if Andrew was receiving a significant amount of government support at the age of 20, and this support decreased as he started to earn more by age 30, his total income could show a substantial decline. Alternatively, this could reflect a change in his work hours or a shift to a lower-paying job.
The data table provided references a government policy where support is reduced by 30 cents for every dollar earned, which could impact total income as work earnings increase. Moreover, the referenced Figure 13.14 suggests that economic events like the 2008 recession can also impact an individual's financial circumstances, sometimes forcing them to revise their retirement plans.
In the context of investment strategy, a 30-year-old might take on more risk in their investments as they have a longer time horizon to recover from any losses, while a 65-year-old might adopt a more conservative approach to protect their savings as they approach retirement.