The Hatfields and the McCoys Both Earn $50,000 Per Year

question 128

Multiple Choice

The Hatfields and the McCoys both earn $50,000 per year in real terms in the labor market, and both families are able to earn a 25% real interest rate on their savings.Assume that all interest is paid out as income in the following year.In the year 2010, both families began to save.The Hatfields saved 8% of their income each year; the McCoys saved 10%.In 2010, the Hatfields consumed ______ more than the McCoys; in 2011, the Hatfields consumed ______ than the McCoys.

• A)$1,000; about $800 more
• B)$2,000; about $250 more
• C)$1,000; about $800 less
• D)$2,000; about $250 less

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Definitions:

Autobiographical Memory

The aspect of memory that pertains to personal life events and experiences, forming an individual's life history.

Generic Memory

Memory that produces scripts of familiar routines to guide behavior.

Recall

Ability to reproduce material from memory.

Mastery Motivation

A drive to achieve competence and control over one’s environment, leading to persistent and focused effort in task completion.