Which of the Following Statements Is False

question 97

Multiple Choice

Which of the following statements is false?

• A)The assumption that income is the only influence on consumption is a simplifying assumption.
• B)Assuming consumption spending responds to income will improve a forecast.
• C)The assumption that only consumption spending responds to income is a simplifying assumption.
• D)Consumption responds to changes in other factors besides income.
• E)The assumption that investment and net exports do not respond to changes in income is based on evidence from the U.S.economy.

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Definitions:

Rent-Control Scheme

A rent-control scheme is a government policy that sets a maximum price that can be charged for rental housing, aiming to make housing more affordable.

Equilibrium Rental Price

The price at which the quantity of rental properties supplied equals the quantity demanded.

Quota Rent

The earnings exceeding the normal anticipated returns due to import or export quotas.

Deadweight Loss

A decrease in economic effectiveness occurring when a good or service doesn't reach its free market equilibrium.