Increases in Consumer Confidence

question 52

Multiple Choice

Increases in consumer confidence

• A)decrease consumption in direct proportion to the increase in consumer confidence.
• B)directly increase consumption.
• C)tend to increase consumption spending.
• D)increase consumption only when the overall price level decreases in the economy.
• E)tend to increase household saving.

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Definitions:

Deadweight Loss

The loss of economic efficiency that occurs when the equitable market outcome is not achieved, often due to taxes, subsidies, or artificially imposed prices like price ceilings or floors.

Perfect Competition

A market structure characterized by a large number of small firms, a homogeneous product, free entry and exit, and perfect information that leads to firms being price takers.

Short-Run Supply Curve

A graphical representation showing the quantity of goods a firm is willing and able to supply at different prices in a given short-term period, holding some factors constant.

Marginal Cost Curve

A graph that displays how the expense of producing one additional unit of a good changes as production volume varies.