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Nana76 [90]
3 years ago
5

"Is it rational for a person to not increase a savings rate over time that was initially set too low? Why do people yield to thi

s irrational behavior?"
Social Studies
1 answer:
In-s [12.5K]3 years ago
5 0

Answer is given below:

Explanation:

  • The economy is very dynamic in nature. There will be a significant change in the time value of money over a period of time.
  • An individual should formulate a savings rate over the years based on his income, his family status and social norms. It is unreasonable to keep the savings rate low as it can have a negative impact in times of emergency.
  • Socio-economic changes and lack of knowledge on the value of afternoon time make people vulnerable to this irrational behavior.
  • They are eager to live and lead life to maximum luxuries. People are very ignorant about future demand or need for savings
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