Consumption Is Most Likely to Respond One- For- One with Changes

question 26

Multiple Choice

Consumption is most likely to respond one- for- one with changes in current income when:

• A) people are able to borrow as much as they wish, as long as they pay it back.
• B) the change in current income is caused by the business cycle.
• C) people believe the change in their current income is permanent.
• D) the change in current income results from a one- time government handout.
• E) people believe the change in their current income is temporary.

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Definitions:

Extra Recess

Additional break time given to students during the school day, beyond the regular scheduled recess, for physical activity, relaxation, or social interaction.

Eyeblink Conditioning

Experimental technique in which subjects learn to pair a formerly neutral stimulus with a defensive blinking response.

Classical Conditioning

A learning process where a neutral stimulus becomes associated with a meaningful stimulus, resulting in a conditioned response.

Eyeblink Conditioning

A form of classical conditioning where a subject learns to blink in response to a previously neutral stimulus that has been paired with an unconditioned stimulus that prompts blinking.