Economics · Financial Literacy
How does 'present bias' pose a systemic risk to the state?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It causes a sudden crash in the sub-prime credit markets.
- 2It prevents the proliferation of usurious informal moneylenders.
- 3It leads to inadequate private retirement savings, forcing the state to provide more social support.✓
- 4It encourages people to invest too heavily in long-term government bonds as they are risk free in nature.
Correct answer
It leads to inadequate private retirement savings, forcing the state to provide more social support.
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