Related to the Economics in Practice on P

question 321

Multiple Choice

Related to the Economics in Practice on p. 156: According to the "paradox of thrift," as individuals increase their saving,

• A) income in the economy increases because there is more money available for firms to invest.
• B) income in the economy increases because interest rates will fall and the economy will expand.
• C) income in the economy will remain constant because the change in consumption equals the change in saving.
• D) income in the economy will fall because the decreased consumption that results from increased saving causes the economy to contract.

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Definitions:

Insurance Premiums

Regular payments made to an insurance company to maintain coverage of a policy.

Regular Premium

Periodic payments made for an insurance policy.

No-fault Insurance

An auto insurance policy wherein insured individuals are compensated by their own insurer, regardless of fault, in the event of an accident.

Collision Deductible

The out-of-pocket expense that a policyholder must pay before an insurance company covers the cost of damage in a collision.