The life-cycle hypothesis says that people save:

for retirement.
out of habit.
in order to become wealthy.
to increase the growth rate of the economy.


In Aesop's fable of the grasshopper and the ant,

the ant resembles a person who acts in the way the life-cycle hypothesis predicts.
the grasshopper resembles a person who acts in the way the life-cycle hypothesis predicts.
both resemble people who act in the way the life-cycle hypothesis predicts.
neither resembles a person who acts in the way the life-cycle hypothesis predicts.


Back to Reading Overview Next Page