Question: In the face of reduced interest rates one financial columnist

In the face of reduced interest rates, one financial columnist gave the following advice: “To compensate for such modest returns, aim to save even more every month” [Clements, 2003]. Use the life cycle model to evaluate whether a rational person would follow this advice. If so, what does it imply about the shape of the individual’s supply curve of saving?

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  • CreatedMarch 25, 2015
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