If We Observe an Economy in Which Desired Saving Has

question 66

Multiple Choice

If we observe an economy in which desired saving has changed,but there has been no change in actual investment,we may infer that ________.

• A)net exports have changed
• B)actual saving has changed
• C)the domestic real interest rate has not changed
• D)all of the above
• E)none of the above

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Definitions:

A Priori

Knowledge or justification that is independent of experience, typically involving logical reasoning or deduction.

Cognitive Misers

A theory suggesting individuals prefer to minimize mental effort in decision making and problem solving, relying on heuristics and shortcuts.

Observing Behavior

The act of watching or noting the actions of individuals or groups for the purpose of analysis or study.

Attribution Theory

The view that people act as intuitive scientists when they observe other people’s behavior and infer explanations about why those people acted the way they did.