SELECT ALL THAT APPLY

question 5

Multiple Choice

SELECT ALL THAT APPLY.Rational choice theory assumes which of the following statements?

• A)Individuals are rational.
• B)Individuals have self-defined interests.
• C)Individuals have the knowledge and ability to pursue their interests.
• D)Individuals are capable of obtaining full information.

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Definitions:

Discretionary Policy

Economic policies based on judgment decisions by policymakers, as opposed to rules-based policies, to manage the economy.

Policy Tools

Policy tools are mechanisms used by government or monetary authorities to influence the economy, such as interest rates, taxation, and government spending.

Economy's Potential

The economy's potential refers to its maximum productive capacity when resources are fully employed, indicating a state where unemployment is at the natural rate and there is no demand-pull inflation.

Fiscal Policy

Policy made by the government which entails modifying how much it spends and adjusts tax rates to control and affect the economic health of a nation.