Saving in Our Simple Model

question 99

Multiple Choice

Saving in our simple model

• A)varies inversely with income
• B)is determined primarily by the interest rate
• C)is positive when a person spends less than her income
• D)can never be negative because it is a stock
• E)can never be negative because it is a flow

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Definitions:

Rational Choice Theory

A framework for understanding economic and societal behavior, positing that individuals act based on their preferences and rational calculations to maximize benefit or utility.

Interacting Individuals

Interacting individuals refer to the process where two or more people communicate or affect each other’s behavior and thoughts.

Benefits

Various forms of support, often from the government, in the form of cash or services, intended to ensure the welfare and protection of citizens or employees.

Rational Choice

A theory in economics and sociology that explains decisions by individuals as based on the attempt to maximize personal advantage, minimizing disadvantages.