Which of the Following Is the Erroneous View That Is

question 123

Multiple Choice

Which of the following is the erroneous view that is associated with the fallacy of composition?

• A)An increase in the supply of money will cause a general increase in the level of prices.
• B)When two events are correlated, the one observed first must have caused the second.
• C)If something is true for an individual, then it must also be true for a group.
• D)A small change in an economic variable will have an unrecognizable but significant effect on the economy.

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Definitions:

Disposable Income

The amount of income left to an individual after taxes have been paid, available for spending and saving.

Control

In an experiment or study, the standard to which comparisons are made; in management, the process of directing and regulating processes, systems, or organizations.

Net Investment

The aggregate investment in new capital assets less the depreciation charges on the current capital assets.

Gross Investment

The total amount spent on purchases of new capital and on replacing depreciated capital within an economy during a specific period.