Question

The main reason people save during their working years is: a. a preference toward matching income with spending over time. b. a high time preference for the present. c. an expectation that they will die early. d. a preference for a smooth consumption path over time.

Answer 1

The correct answer is a. a preference toward matching income with spending over time.

Step-by-step explanation:

The main reason people save during their working years is to spend it when their income are lower at the time of their retirement.

So, from the given options the correct answer is a. a preference toward matching income with spending over time.

Answer 2

Answer: The correct answer is "d. a preference toward a smooth consumption path over time.".

Explanation: The main reason people save during their working years is a preference toward a smooth consumption path over time since they prefer to consume what is just and necessary so that in the future, even if they are affected by different circumstances, they can continue to maintain the same standard of living and / or consumption.