If Expectations About Future Income Change, There Is

question 14

Multiple Choice

If expectations about future income change, there is

• A)an increase in saving if people expect income to increase in the future.
• B)a decrease saving if people expect income to decrease in the future.
• C)a change in the quantity of loanable funds supplied and a movement along the supply of loanable funds curve.
• D)no change in saving until income actually changes.
• E)a decrease in saving if people expect income to increase in the future.

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Definitions:

How Much Decision

Decisions relating to the quantity of goods or services to use, produce, or purchase, typically based on cost-benefit analysis.

Opportunity Cost

In economics, it refers to the benefit lost when choosing one alternative over another.

Mutual Fund

An investment vehicle comprising a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, or other assets.

Explicit Costs

Direct, out-of-pocket expenses incurred in the operation of a business, such as wages, rent, and materials.