Consumption Is Most Likely to Respond One-For-One with Changes in Current

question 64

Multiple Choice

Consumption is most likely to respond one-for-one with changes in current income when

• A)the change in current income results from a one-time bonus.
• B)people believe the change in their current income is temporary.
• C)people are able to borrow as much as they wish, as long as they pay it back.
• D)the change in current income is caused by the business cycle.
• E) none of the above

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Definitions:

Government Measures

Policies or actions taken by a government to manage or solve a particular issue, including legislative acts, regulations, and programs.

Planned Obsolescence

A strategy used by manufacturers to intentionally design products with a limited useful life, encouraging consumers to purchase replacements more frequently.

Consumers

Individuals or entities that purchase goods or services for personal use, not for manufacture or resale, playing a central role in economies by driving demand.

Cultural Relativism

The principle that an individual's beliefs and activities should be understood by others in terms of that individual's own culture.