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Which of These Dichotomies Best Characterizes the Relationship Between System-1

question 11

Multiple Choice

Which of these dichotomies best characterizes the relationship between System-1 and System-2 thinking?


Definitions:

Marginal Tax-Rate

The rate at which the next dollar of taxable income is taxed.

Substitution Effect

The change in consumption that results when a price change moves the consumer along a given indifference curve to a point with a new marginal rate of substitution.

Income Effect

The change in consumption that results when a price change moves the consumer to a higher or lower indifference curve

Aggregate Demand

Aggregate demand represents the total demand for goods and services within an economy at a given overall price level and in a given time period.

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