Question

Households make four kinds of economic decisions (textbook, pp. 4–5). Consider two households, one with children aged 6 and 8, and the other with “children” aged 26 and 28, that are otherwise identical. Using the four economic decision categories (Consumption and saving decisions, investment decisions, financing decisions, risk-management decisions), discuss how these households’ financial decisions would be similar and how they would be different.

Answer 1

IN TERMS OF CONSUMPTION both household have same consumption and savings as both families are identical.

if we go with other three decision than both family have different goal so they have different avenues to fulfill there goal.

they both have different opinion in terms of investment as one family have dependent child and the both family have same opinion in therms of financial decision as they have same financial condition. in risk management decision both family have there own opinion because they have there own goal.