Which of the Following Is a Common Assumption That Economists

question 8

Multiple Choice

Which of the following is a common assumption that economists make about the behaviour of elected officials?  

• A) that elected officials try to maximize the size of their government salaries 
• B) that elected officials try to maximize their control over the budget process 
• C) that elected officials try to maximize the number of votes they receive in the next election 
• D) that elected officials try to maximize the government's expenditures

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Definitions:

Interest Rate

is the cost of borrowing money, expressed as a percentage of the principal, that lenders charge borrowers or the rate earned on deposits.

Expected Returns

Expected returns are the anticipated profit or loss from an investment, reflecting the potential financial gains or risks based on historical data and market trends.

Investment Demanded

Investment demanded refers to the total amount of spending by businesses and individuals on capital goods like machinery, buildings, and technology, to increase future productivity.

Interest Rate

The percentage of a sum of money charged for its use, often expressed as an annual percentage.