Which of the Following Is Correct

question 57

Multiple Choice

Which of the following is correct?

• A) As saving decreases, disposable income increases.
• B) As disposable income increases, the real interest rate increases.
• C) As disposable income decreases, saving decreases.
• D) As saving increases, investment by households decreases.

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Definitions:

Behavioral Economics

A field of economics that studies the effects of psychological, social, cognitive, and emotional factors on economic decisions.

Time Inconsistency

The tendency of individuals to change their plans or preferences over time in ways that they themselves will later regard as being against their own interests.

Myopia

Short-sightedness, in a business context, refers to a focus on short-term results at the expense of long-term interests.

Conceptualizing The Future

The process of envisioning and planning for future trends, changes, and developments in an industry or society.