Which One of the Following Represents Local Consumption Smoothing

question 28

Multiple Choice

Which one of the following represents local consumption smoothing?
I. Saving during your working years for retirement
II. Borrowing money to buy a car
III. Putting off a vacation for a year until you can afford it

• A) I only
• B) II and III only
• C) I and II only
• D) I, II, and III

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Definitions:

Placebos

Substances with no therapeutic effect, often used as a control in testing new drugs, to assess the psychological impact of receiving treatment.

Nocebos

Refers to a detrimental health effect that results from negative expectations of the patient and is the counterpart to the placebo effect.

Placebo Response

A beneficial health outcome resulting from a person's expectation of treatment rather than from the actual treatment itself.

Expectancy

The anticipation or belief about what is likely to happen in the future.