When Economists Say That People Act as Rational Decision Makers

question 103

Multiple Choice

When economists say that people act as rational decision makers, that means

• A)they gather all relevant information before making their purchases
• B)once a pattern of behavior has been established, people tend to become set in their ways
• C)people respond in predictable ways to changes in costs and benefits
• D)people rarely make errors when they are permitted to make transactions
• E)once made, decisions are never reversed

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Definitions:

Savings Rate

The proportion of disposable income that individuals or households save rather than spend.

Consumption

The use of goods and services by households, constituting one of the primary components of gross domestic product (GDP).

China

A country in East Asia, the world's most populous nation, with a long history, rich culture, and significant economic influence.

U.S.

Refers to the United States of America, a country in North America known for its significant influence on global politics, economy, and culture.