When an Economy Shifts Away from Production of Consumer Goods

question 54

Multiple Choice

When an economy shifts away from production of consumer goods and toward production of capital goods,for the average worker this trade-off means

• A) a higher standard of living.
• B) longer work hours.
• C) a lower savings rate (as a percentage of income).
• D) more leisure time.
• E) more disposable income.

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Definitions:

Scarcity

The limited availability of resources to meet unlimited wants and needs.

Economic Principle

A widely accepted generalization that guides the analysis of economics, helping to predict how economic agents will behave under certain conditions.

Incentives

Factors or stimuli that motivate or encourage individuals or entities to act in a certain way, often aimed at achieving a specific outcome or behavior.

Community

A group of people living in the same place or having a particular characteristic in common, or the feeling of fellowship with others due to shared attitudes, interests, and goals.