How is a households precautionary savings likely to be, Operation Management

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How is a households precautionary savings likely to be

How is a household’s precautionary savings likely to be affected by the following events?

(Hint: precautionary savings reflects how much a household SHOULD save because of uncertainty, not how much they can save.)

1) The main wage earner in the house switches from a career in management at a large corporation to starting a small consulting business.

2) The household is given $5 million from a wealthy relative’s estate.

c) A couple’s last child graduates from college

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