1. Angela knows that she will earn $80 this week and $40 next week.

However, she wants to spend $60 each week on food and other items. Therefore, she sets aside $20 of this weeks income and waits till next week to spend it. What is this an example of? a. Saving to smooth consumption 1. Which of the following is an example of a fixed cost to banks with savings? b. The costs of maintaining account records. 1. Which of the following is a disadvantage associated with ROSCAs? c. ROSCAs generally allow people to save only a fixed sum for a fixed rotation; thus, they are not very flexible. 1. What is a major advantage that ROSCAs have relative to self-help groups? a. ROSCAs require almost no accounting skills to run. 1. If fruit vendors in India had drunk one less cup of tea per day and invested the money in their business, their income at the end of the day would have been _______ after thirty days. c. Twice as high 2. True or False: In the Philippines, Karlan et al. (2007) found that both the debt buyout and the financial training treatments were successful in keeping poor fruit vendors out of debt in the long run. b. False

1. What is puzzling about rates of fertilizer use in some parts of sub-Saharan Africa? b. Despite fertilizer causing significant increases in crop yields, very few people use it. 1. In the SAFI 2 program, which of the following had the greatest impact on the use of fertilizer? c. When the free delivery for fertilizer was offered. 1. Someone who has time-inconsistent preferences: b. Discounts the entire future relative to today more than the day after tomorrow relative to tomorrow. 1. Examine the following table from Ashraf, Karlan, and Yin (2006): What percent of respondents showed preferences that are consistent with the model of preferences described in the previous section? 25.7 1) In her study, Schaner (2012) found that couples who had similar time preferences ____ to the interest rate when choosing how to save, and that couples who had different time preferences ____ to the interest rate. c. Reacted more; reacted less

1. Which savings strategies/instruments do the poor commonly use? (Check all that apply.) NOT AC NOT BC

NOT AD 2. The findings regarding how vegetable vendors borrowing behavior responded to the buyout experiment are consistent with which of the following? (Check all that apply.) c. Lack of financial protections against household shocks (e.g. health problems) d. Long-run self-control problems 3. Why is it better to test savings behavior using fertilizer than another costlier and less-divisible agricultural input, such as a two-day lease on a new type of tractor where the lease length is nonnegotiable? (Check all that apply.) NOT AC NOT ACD NOT BCD NOT BD 4. The SAFI experiment found which of the following? (Check all that apply.) NOT AB NOT AD NOT BC NOT CD 5. In what sense does the following utility function provide an example of time-inconsistent preferences? (Assume that both beta and delta are less than 1.) b. The delta terms suggest that each future period is valued more and more. 6a) Suppose an individual is indifferent between $1 today and $2 tomorrow, and is indifferent between $1 a year from now and $2 a year and one day from now. This individual has: c. time-consistent preferences b) Suppose an individual is indifferent between $1 today and $1.50 tomorrow, and is indifferent between $1 a year from now and $2 a year and one day from now. This individual has: b. "patient now, impatient later" preferences c) Suppose an individual is indifferent between $1 today and $2 tomorrow, and is indifferent between $1 a year from now and $1.50 a year and one day from now. This individual has: a. hyperbolic preferences d) Suppose an individual is indifferent between $1 today and $1.50 tomorrow, and is indifferent between $1 a year from now and $1.01 a year and one day from now. This individual has: a. hyperbolic preferences 7. This exercise is intended to provide an example of the power of compounding. Suppose that a vegetable vendor pays 7% interest daily on a $10 loan. Then, suppose that this individual was able to save $0.50 per day by drinking less tea. Calculate the number of days it would take for the vendor to no longer need to borrow money in order to purchase $10 of vegetables (i.e. the day number on which no loan is needed). NOT 22 NOT 9999999999 NOT 62 NOT 30

8a) In Ashraf, Karlan, and Yin (2006), the authors found that roughly one in four existing or former bank clients were willing to sign up for a commitment savings product. Clients who signed up for the product likely did so because it offered which of the following benefits? (Check all that apply.) NOT BC NOT BD NOT BCD NOT BD b) The authors find that savings account balances were 81% higher among those offered the commitment savings product. If the intervention only affected those who opened commitment savings accounts, this implies a balance increase of 324% among those who opened accounts. Why do the authors choose to primarily focus on the 81% figure instead of just presenting this larger number and arguing that this represents the average impact in the population of using the commitment savings product? (Choose the best response.) a. While people assigned to treatment and control do not differ (in expectation) based on observable or unobservable characteristics, individuals who choose to use the commitment savings product may be different in various ways from those who do not.