A Professor Declared "With the Recent Drop in the Value

question 48

Multiple Choice

A professor declared "with the recent drop in the value of my stock portfolio,I will have to put off retirement by another two years." This decision reflects

• A) the substitution effect.
• B) the income effect.
• C) the portfolio effect.
• D) the effect of a budget constraint with a spike.

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Definitions:

Displacement

A psychological defense mechanism where negative feelings are transferred from the original source of distress to a less threatening object or person.

General Intelligence

A theory suggesting the existence of a broad mental capacity that influences performance on cognitive ability measures.

Spatial Intelligence

The ability to think in three dimensions, involving the capacity to visualize and manipulate objects and spatial relationships in the mind.

Naturalist Intelligence

One of Howard Gardner's multiple intelligences, characterized by an ability to recognize, categorize, and draw upon certain features of the environment.