Beth Really Wants to Get in Shape,but Just Can't Seem

question 96

Multiple Choice

Beth really wants to get in shape,but just can't seem to ever get herself to the gym.An example of a commitment device Beth could use would be:

• A) to spend time before going to the gym doing something she really enjoys doing, like seeing a movie.
• B) to allow herself one dessert for each visit to the gym.
• C) to make arrangements to meet with an exercise buddy every day at the gym to work out together.
• D) None of these is a commitment device.

---

Definitions:

Consumption

The act of households utilizing goods and services.

Disposable Income

The sum of funds that families can allocate to expenditure and savings once they've paid their income taxes.

MPC

The marginal propensity to consume, which represents the proportion of an increase in income that is spent on consumption rather than being saved.

Saving

The share of earnings not used for immediate spending but saved or invested for future needs.