When the Price of a Given Product Declines, the Consumer's

question 182

Multiple Choice

When the price of a given product declines, the consumer's spendable income rises because it takes less income to purchase the same quantity. This is called the:

• A) net export effect.
• B) income effect.
• C) substitution effect.
• D) interest effect.

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Definitions:

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors, driving individuals to pursue and attain goals.

Maslow Hierarchy

A psychological theory proposing a five-tier model of human needs, from basic (physiological) to more complex (self-actualization) needs.

Social

Pertains to the interactions and relationships among individuals in a society and the structure and norms that guide these interactions.

Self-actualization

A concept in psychology, often associated with Maslow's hierarchy of needs, representing the realization of one's potential and the fulfillment of personal talents and capabilities.