Suppose That Saving Equals $0 When Disposable Income Equals $1

question 102

Multiple Choice

Suppose that saving equals $0 when disposable income equals $1 trillion. Along the saving function, occurs to the left of $1 trillion and occurs to the right of $1 trillion.

• A) saving; saving
• B) saving; dissaving
• C) dissaving; dissaving
• D) dissaving; saving

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Definitions:

Personal Fable

Another aspect of adolescent egocentrism; the belief that our feelings and ideas are special and unique and that we are invulnerable.

Assimilation

The cognitive process in which new information is integrated into pre-existing schemas or knowledge structures.

Existing Schema

A cognitive framework or concept that helps organize and interpret information, existing schemas are used by the brain to perceive new information.

Accommodation

In cognitive psychology, the process of altering one's mental representations to better accommodate external realities.