If an Economist Wants to Make a Prediction About the Effects

question 38

Multiple Choice

If an economist wants to make a prediction about the effects of a change in disposable income on the change in consumption spending based on historical data, she must assume that

• A)the future will closely resemble the past.
• B)consumption and disposable income will be negatively related.
• C)the consumption function will have a downward slope.
• D)as disposable income increases, consumer spending will remain constant.

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Definitions:

Schwann Cell

A type of glial cell in the peripheral nervous system which forms the myelin sheath around neuronal axons, enabling faster transmission of electrical signals.

Myelin Sheath

The insulating layer around many nerve fibers, consisting of protein and fatty substances, which enables faster transmission of electrical impulses.

Axon

A long, slender projection of a neuron that conducts electrical impulses away from the neuron's cell body.

Dendrite

Dendrites are branched extensions of a neuron that receive signals from other neurons and transmit them towards the cell body.